ABSTRACT
Free international movement of capital, free trade, and e-trade in financial services have combined to make regional currency consolidation inevitable. In light of this prospect, advocacy of rapid dollarization, in some cases throughout the entire Western Hemisphere, has spread beyond the United States (US). Informal external dollarization, with the US dollar circulating side by side with the respective national currency abroad without benefit of legal tender rights, had become widespread in the aftermath of World War II, particularly in the occupied countries. Formal or complete dollarization, under which the US dollar would become the sole legal tender in the adopting country, was being ever more openly debated in business and government. Unilateral monetary union is the distinctly second-best choice that is left for countries that can not do any better than embrace an established dominant currency as their own without formal co-ordination with its issuer.
