If I go to a foreign country, I’d prefer to see foreign stuff. Still, it’s hard to escape American staples, like McDonald’s, no matter where you go. English is also becoming commonplace—understandably so, but something is still lost in the process—and American branding abounds.
A major reason I love to travel is to see the diversity of the world. America has left—and continues to leave—an unmistakable imperial imprint on the rest of the world. It can be very difficult to find a region that doesn’t bear some trace of American influence or culture. Western media can be overbearing, such that even remote villagers in faraway lands are tuning into the latest Hollywood blockbusters. At the same time, foreigners find it “cool” or trendy to adopt the western customs they see on TV or social media, further exacerbating the dominant influence.
So, I’m always a little disappointed when I prepare to travel to another country and see their official currency listed as the United States dollar. That sucks.
Ecuador had its own currency, the Ecuadorian sucre, until its dollarization in 2000. Yeah, “dollarization” is a real word, coined (heh.) because this isn’t a unique case, with other countries also adopting the dollar as either their sole official currency or as an officially recognized currency alongside the native one.
From a logistical standpoint, it makes sense. The American dollar isn’t going anywhere; it’s a very reliable currency that’s recognized worldwide. Adopting the dollar means that a country no longer needs to handle the burden of producing money, researching anti-counterfeiting measures, and, most crucially, taming inflation rates.
Out-of-control inflation is the primary cause of dollarization. Take a look at the sucre’s inflation over time, with it skyrocketing in the 1990s (source):
- 1917: $1 = 2.60 sucres
- 1946: $1 = 13.5 sucres
- 1950: $1 = 15 sucres
- 1961: $1 = 18 sucres
- 1970: $1 = 25 sucres
- 1983: $1 = 42 sucres
- 1990: $1 = 800 sucres
- 1995: $1 = 2,564.50 sucres
- 1996: $1 = 3,189.50 sucres
- 1997: $1 = 3,988.30 sucres
- 1998: $1 = 5,446.60 sucres
- 1999: $1 = 11,786.80 sucres
- 2000: $1 = 25,000 sucres
Other Latin American countries have also experienced insane inflation rates. There are a few routes that can be taken to quell the issue:
- Peru brought inflation under control by introducing a new, stable currency, the Peruvian sol, in 1991. It would replace their previous currency, the Peruvian inti, which was itself introduced in 1985 to combat the previous iteration’s inflation rate.
- Paraguay’s response to rising inflation was to wait for their currency to stabalize at extremely high numbers. Their largest banknote is now 100,000 guaraníes, currently only worth $12.73 USD. They did away with their smallest coins, due to them becoming literally worthless.
- Argentina and Chile took a similar route to Paraguay, although they were able to get the numbers under control a bit sooner. Argentina’s largest banknote is 20,000 Argentine pesos, which is worth $19.81 USD. Chile’s largest banknote is 20,000 Chilean pesos, which is worth $20.40 USD.
With high inflation rates plaguing Latin America, it’s no wonder that Ecuador chose to give up their currency and adopt the American dollar. It’s the easiest fix of all these.
I asked a native Ecuadorian what he thought of Ecuador adopting the U.S. dollar, and he was quite pleased with the transition. It seems to have taken away a lot of the anxiety and stress of the citizens, whose entire savings could become almost worthless in no time if they’d stuck with the sucre.
I was happy to see that Ecuador still circulates their own coins, although they contract out the minting to Canada and Mexico. They issue coins that are equivalent in value to their U.S. counterparts:
Here I’ve photographed every type of coin that I received as change throughout my time in Ecuador.
Ecuador issues four of their own coins:
- 5 centavos (worth 5¢)
- 10 centavos (worth 10¢)
- 25 centavos (worth 25¢)
- 50 centavos (worth 50¢)
These coins are tied to the value of the U.S. dollar, making them interchangeable with the U.S. coins (only in Ecuador, of course). The Ecuadorian coins are the same dimensions and weight—at least to my perception of touch—as the American coins they’re based on.
Wikipedia says there’s also a 1 centavo coin in circulation, but this doesn’t align with my experience. I never saw such a coin in my almost-two-month stay, despite having many cash transactions. However, I did receive U.S. pennies in change.
Ecuador doesn’t issue its own 1 dollar coin, but, interestingly, the U.S. dollar coin is extremely common throughout the country. The U.S. 50¢ piece is also remarkably common there. I hardly ever see these coins in America. I observed the same phenomenon in Panama; both countries use certain U.S. coins much more than America itself!