alt Hacker NewsThis means giving up all the advantages of central banking and is generally only done informally by countries experiencing hyperinflation without capital controls. It's a marker of a failed state.
I remember in live TV debates for the 2014 Scottish independence referendum, the Yes leader insisted that Scotland could not be prevented from using the Pound sterling. It's technically true, but a very, very bad idea.
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> ”This means giving up all the advantages of central banking … It's a marker of a failed state.”
There are a number of countries/territories which have their “own” currency, but its value (exchange rate) is fixed directly to the USD:
• Hong Kong
• Saudi Arabia
• United Arab Emirates
• Qatar
• Jordan
• Oman
• Bahrain
• Panama
• etc
These are not failed states!
> This means giving up all the advantages of central banking and is generally only done informally by countries experiencing hyperinflation without capital controls. It's a marker of a failed state.
The US did not have a central bank until 1914. And there was zero net inflation from 1800-1914. The central bank introduced endemic inflation, which appeared immediately.
Wouldn’t joining EU give up central banking in the same way?
Montenegro unilaterally uses the euro and it doesn't seem to otherwise be a failed state. Besides this being a "marker", what do you think are the actual problems caused? Like why does a small country need its own capital controls when there is a very stable currency available nearby?