Title: Currency Union
Headings: Currency Union
Currency Union
What Is a Currency Union?
Key Takeaways
What Causes Drastic Currency Changes?
Understanding Currency Unions
History of Currency Unions
Evolution of the European Currency Union
Criticism of the European Monetary System
Article Sources

Content: Currency pegs create stability between trading partners and can remain in place for decades. The Hong Kong dollar has been pegged at a rate of HK$7.8 to the U.S. dollar since 1983. 3 ﻿ The Bahamian dollar has been pegged at parity with the greenback since 1973. 4 ﻿
In addition to a peg, some countries actually adopt a foreign currency. For example, the U.S. dollar is the official currency in El Salvador and Ecuador, along with the Caribbean island nations of Bonaire, Sint Eustatius and Saba. 5 ﻿ The Swiss franc is the official currency in both Switzerland and Lichtenstein. There are more than 20 official currency unions, the largest of which is the euro, which is used by 19 of the 28 members of the European Union. 1 ﻿ Another is the CFA franc, backed by the French treasury and pegged to the euro, which is used in 14 Central and West African in addition to Comoros. 6 ﻿ The Eastern Caribbean Dollar is the official currency for Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. 7 ﻿
History of Currency Unions
In the past, countries have entered into currency unions to facilitate trade and strengthen their economies, and to also unify previously divided states.