Loyal readers of this column, if there are any, will know that a few weeks ago I was in the Galápagos Islands, part of Ecuador. As is inevitable, I came back with a handful of small change. There is a US dollar coin, and another coin that simply states on its face “fifty cents”.
The 50 cent coin is minted for the government of Ecuador, but there is no Ecuadorean currency, and the cents referred to are therefore not Ecuadorean cents. Ecuador is the largest country in the world to have chosen the route commonly known as “dollarisation”.
A decade ago, its government made a unilateral decision to adopt the currency of another country: it uses the US dollar with the acquiescence, though not the agreement, of the American government and Federal Reserve. The coin in my pocket represents 50 US cents, but the US does not issue 50 cent coins, only quarters, nickels, dimes and pennies. While everyone in the Galápagos or the national capital Quito would accept my 50 cent coin, no one in Washington would. Curiously, genuine dollar coins, minted for the US Treasury, have not proved popular in the US but are widely circulated in Ecuador.