Title: Currency substitution - Wikipedia
Headings: Currency substitution
Currency substitution
Contents
Name
Origins
Measures
Types
Effects
On trade and investment
On monetary and exchange rate policies
On banking systems
Determinants of the currency substitution process
The dynamics of the flight from domestic money
Institutional factors
Anchor currencies
Australian dollar
Euro
Indian rupee
New Zealand dollar
Pound Sterling
South African rand
US dollar
Countries/regions using the US dollar exclusively
Countries using the US dollar alongside other currencies
Others
See also
References
Footnotes
Works cited

Content: Dollarization." The Wiley-Blackwell Encyclopedia of Globalization (2013). Measures
There are two common indicators of currency substitution. The first measure is the share of foreign currency deposits (FCD) in the domestic banking system in the broad money including FCD. The second is the share of all foreign currency deposits held by domestic residents at home and abroad in their total monetary assets. Types
Unofficial currency substitution or de facto currency substitution is the most common type of currency substitution. Unofficial currency substitution occurs when residents of a country choose to hold a significant share of their financial assets in foreign currency, even though the foreign currency is not legal tender there. They hold deposits in the foreign currency because of a bad track record of the local currency, or as a hedge against inflation of the domestic currency. Official currency substitution or full currency substitution happens when a country adopts a foreign currency as its sole legal tender, and ceases to issue the domestic currency. Another effect of a country adopting a foreign currency as its own is that the country gives up all power to vary its exchange rate.