Currency substitution
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Currency - emerging markets.
A process in which a country starts to accept a foreign currency for certain purposes, in parallel with its domestic currency.
Most commonly an emerging market country might start to accept a more established foreign currency, for example the US dollar.
This process is also sometimes known as dollarization.
- CBDCs could reduce currency substitution
- "CBDCs can also improve transparency in money flows and could help reduce currency substitution (when a country uses a foreign currency in addition to, or instead of, its own)."
- International Monetary Fund - The Ascent of CBDCs - September 2022.
See also
