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A currency union (also known as monetary union) involves two or more states sharing the same currency without their necessarily having any further integration (such as an economic and monetary union, which would have, in addition, a customs union and a single market).
Three types of currency unions exist:
- Informal – unilateral adoption of foreign currency
- Formal – adoption of foreign currency by virtue of bilateral or multilateral agreement with the issuing authority, sometimes supplemented by issue of local currency in currency peg regime
- Formal with common policy – establishment by multiple countries of a common monetary policy and issuing authority for their common currency
The theory of the optimal currency area addresses the question of how to determine what geographical regions should share a currency in order to maximize economic efficiency.
List of currency unions
|Currency||Union||Users||Est.||Status||Population||GDP (nominal $)|
|CFA franc||Issued by the (French) Overseas Issuing Institute between 1945−1962 then by the Central Bank of West African States and the Bank of Central African States|| Benin
Central African Republic
Republic of the Congo
|1945||Formal, common policy||151,978,440|
|CFP franc||Issued by the (French) Overseas Issuing Institute|| French Polynesia
Wallis and Futuna
|1945||Formal, common policy||552,537|
|East Caribbean dollar||Eastern Caribbean Currency Union of the OECS|| Anguilla
Antigua and Barbuda
Saint Kitts and Nevis
Saint Vincent and the Grenadines
|1965||Formal, common policy
de facto EMU for CSME members
|Euro||International status and usage of the euro|| Eurozone:
||1999/2002|| Formal, common policy and EMU for EU members
Formal for Monaco and SBAs (those form a de facto EMU with the Eurozone)
Formal for Andorra since 2011
Informal for Kosovo, Montenegro
Formal for the rest
|Hong Kong dollar|| Hong Kong
||1977||Informal; Decreto-Lei n.º 16/95/M prohibiting the refusal of the pataca by merchants and businesses.||7,775,200|
||Managed together by the Monetary Authority of Singapore|| Brunei
||1967||Formal; currencies mutually exchangeable||5,137,000||36,438,000,000|
|Armenian dram|| Armenia
|Australian dollar|| Australia
|Pound sterling||Sterling area (former)|| United Kingdom
and overseas territories:
|1939||Semi-formal. UK banknotes are legal tender in locations outside the UK. Local currencies are pegged to the GBP but not necessarily accepted in the UK: Guernsey pound, Manx pound, Jersey pound and Alderney pound, Falkland Islands pound, Gibraltar pound, Saint Helena pound||62,321,000|
|Indian rupee|| India
Nepal minor usage
|New Zealand dollar|| New Zealand
|Israeli new sheqel|| Israel
|Jordanian dinar|| Jordan
|Russian ruble|| Russia
|South African rand||Multilateral Monetary Area|| Lesotho
de facto customs and monetary union for SACU members
|Swiss franc|| Liechtenstein
since 1924 creation of a customs union and common market in EFTA in a de facto EMU
|Turkish lira|| Turkey
|United States dollar|| United States
|Formal for insular areas and sovereign status with Compact of Free Association, informal for other areas||339,300,000|
Additionally the autonomous and dependent territories, such as some of the EU member state special territories, are sometimes treated as separate customs territory from their mainland state or have varying arrangements of formal or de facto customs union, common market and currency union (or combinations thereof) with the mainland and in regards to third countries through the trade pacts signed by the mainland state.
|Bolivarian Alternative for the Americas||SUCRE|| Latin America
|?||It is planned to begin as an electronic currency involving all countries of the Bolivarian Alliance for the Americas.|
|East African Community||East African shilling||Africa||2015|
|West African Monetary Zone||Eco||Africa||2020||Inside Economic Community of West African States, planned to eventually merge with West African franc|
|ASEAN+3||Asian Monetary Unit||Asia||?||a free trade agreements matrix partially established|
|Cooperation Council for the Arab States of the Gulf||Khaleeji||Arabian Peninsula||c. 2013-2020||Oman and the United Arab Emirates do not intend to adopt the currency at first but will do at a later date.|
- between Bahrain and Abu Dhabi using the Bahraini dinar
- between Bahrain, Kuwait, Oman, Qatar and the Trucial States, using the Gulf rupee from 1959 until 1966
- between Aden and South Arabia, Bahrain, Kenya, Kuwait, Oman, Qatar, British Somaliland, the Trucial States, Uganda, Zanzibar and British India (later independent India) using the Indian rupee
- between British India and the Straits Settlements (1837–1867) using the Indian rupee
- between Czech Republic and Slovakia (briefly from January 1, 1993 to February 8, 1993) using the Czechoslovak koruna
- between Ethiopia and Eritrea using the Ethiopian birr
- between France, Monaco, and Andorra using the French franc
- between the Eastern Caribbean, Jamaica, Barbados, Trinidad and Tobago and British Guiana using the British West Indies dollar
- between the Eastern Caribbean, Barbados, Trinidad and Tobago and British Guiana using the Eastern Caribbean dollar
- between Italy, Vatican City, and San Marino using the Italian lira
- between Jamaica and the Cayman Islands using the Jamaican pound and later Jamaican dollar
- between Kenya, Uganda and Zanzibar using the East African rupee
- between Kenya, Uganda and Zanzibar (and later Tanganyika) using the East African florin
- between Kenya, Tanganyika and Zanzibar (later merged as Tanzania), Uganda, South Arabia, British Somaliland and Italian Somaliland using the East African shilling
- Latin Monetary Union (1865–1927), initially between France, Belgium, Italy and Switzerland, and later involving Greece, Romania, Spain and other countries.
- between Liberia and the United States using the United States dollar
- between Mauritius and Seychelles using the Mauritian rupee
- between Nigeria, the Gambia, Sierra Leone, the Gold Coast and Liberia using the British West African pound
- between Prussia and the North German states (1838–1857) using the North German thaler
- between Russia and the former Soviet republics (1991–1993) using the Soviet ruble
- between Qatar and all the emirates of the UAE, except Abu Dhabi using the Qatari and Dubai riyal
- between Saudi Arabia and Qatar using the Saudi riyal
- between Samoa and New Zealand using the New Zealand pound
- Scandinavian Monetary Union (1870s until 1924), between Denmark, Norway and Sweden
- between the Solomon Islands, Papua New Guinea and Australia using the Australian dollar
- South German guilder
- between Spain and Andorra using the Spanish peseta
- between Trinidad and Tobago and Grenada using the Trinidad and Tobago dollar
- between Brunei, Malaysia, and Singapore (1953–1967) using the Malaya and British Borneo dollar
- between Cambodia, Laos, and Vietnam (1885–1952) using the French Indochinese piastre
- between South Africa and Botswana (1966–1976) using the South African rand
- between Egypt and Sudan using the Egyptian pound – until 1956
- between West Germany and East Germany between 1 July 1990 and 3 October 1990, as part of a temporary, so-called "Monetary, Economic and Social Union" prior to German reunification.
- between Republic of Ireland and United Kingdom between 1928 and 1979 using the Irish Pound.
- proposed Pan-American monetary union – abandoned in the form proposed by Argentina
- proposed monetary union between the United Kingdom and Norway using the pound sterling during the late 1940s and early 1950s
- Anguilla and Montserrat are members of OECS currency union, but not of the CSME.
- http://www.marcasepatentes.pt/files/collections/pt_PT/1/2/14/CPI%201995.pdf Decreto-Lei n. 16/95/M
- To all intents and purposes a monetary union. They are the last two nations whose dollars have remained at par and mutually interchangeable since the days when the Spanish Dollar was the united currency of large areas of the New World and South East Asia.
- alongside the ngultrum
- Not official, but freely used as a tender in Nepal, due to primarily the economic flux with India and also the instability caused by that country's civil war.
- Compact of Free Association, Article V, Section 251
- EU Overseas countries and some other territories participate partially in the EU single market per part four of the Treaty Establishing the European Community; Some EU Outermost regions and other territories use the Euro of the currency union, others are part of the customs union; some participate in both unions and some in neither.
Territories of the United States, Australian External Territories and Realm of New Zealand territories share the currency and mostly also the market of their respective mainland state, but are generally not part of its customs territory.
- www.dunatv.hu (Hungarian)
- Bolton, Sally (10 December 2001). "A history of currency unions". guardian.co.uk. Retrieved 26 February 2012.
France persuaded Belgium, Italy, Switzerland and Greece
- Not currently on any political agenda, based mostly off conspiracy theories.
- Acocella, N. and Di Bartolomeo, G. and Tirelli, P. , ‘Monetary conservatism and fiscal coordination in a monetary union’, in: ‘Economics Letters’, 94(1): 56-63.
- Bergin, Paul (2008). "Monetary Union". In David R. Henderson (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267.
- African monetary union inches closer
- United States of Southern Africa?
- East Africa's first steps towards union
- West Africa opts for currency union
- Gulf States push for single currency
- 'Limited gains' from Gulf single currency
- Do the Mercosur Countries Form an Optimum Currency Area?
- Argentina plans monetary union
- Quadrant Magazine article on the Pacific
- Economist- Antipodean currencies (Australia and New Zealand)
- Three Perspectives on an Australasian Monetary Union
- Reasons for the collapse of the Rouble Zone
- In Search of the "Ruble Zone"
- OECD Development Centre – the Rand Zone
- A single African currency in our time?
- South Africa proposes adoption of the rand as provisional SADC common currency