Dollarization Rest in Peace
What is America's interest in dollarization? Formal adoption of the dollar by other governments creates both opportunities and risks for the United States, political as well as economic. But few benefits or costs can be estimated in advance, leaving much room for debate and disagreement. The argument of this paper is that no presumption can be established either way, whether for or against dollarization, from a strictly U.S. point of view. Unless directly challenged by efforts elsewhere to establish formal currency blocs, the United States has no interest in promoting a wider role for the greenback.