Currency substitution

From ACT Wiki
Jump to navigationJump to search

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

External link