In this article, we discuss the top 20 countries using the US Dollar as Currency (or pegged to it) as of 2024. For context, currency pegging refers to when a country attaches its exchange rate to another currency or another measure of value, such as gold. Countries that have their currencies pegged to USD use monetary policies like buying or selling reserve assets to manage their currency value.
Moreover, some countries have dollarization in place. Dollarization refers to when a country adopts USD as its official currency — as a medium of exchange or legal tender, alongside or instead of its domestic currency. Dollarization is more common in developing countries with a weak domestic currency or an unstable economic environment as dollarization lowers inflation rates and enhances policy credibility, encouraging foreign investment. Some countries also go for dollarization because of the hyperinflation of their domestic currency. For instance, Zimbabwe opted for the US dollar and other currencies after abandoning its domestic currency in 2009 to escape hyperinflation.
For over 75 years, the United States Dollar has been the world’s primary reserve currency. It dates back to the mid-1940s when the Bretton Woods system was established with the aim of creating an efficient foreign exchange system. The system prevented competitive devaluations of currencies and encouraged international trade and economic growth. Under it, the US dollar was pegged to gold, and other currencies were pegged to the US dollar.
However, in the 1970s, the Bretton Woods system collapsed completely. Since then, there have been mild fluctuations in the dollar’s exchange rate. Today, the rise of other global economic powers, like China and Japan, threatens the supremacy of the US dollar. In addition to other currencies gaining strength, extensive trade sanctions by the US government have also driven some countries to transact in currencies other than the US dollar.
For instance, the US Treasury Department imposed unprecedented sanctions on Russia following the invasion of Ukraine in February 2022 to hold it “accountable for its premeditated and unprovoked invasion.” Freezing the US dollar reserves of a sovereign state has left countries with different geopolitical interests than the US, such as China or the Gulf states, questioning their dependency on the dollar. Following such events, many countries consider diversifying their reserves rather than putting all eggs in one basket.
In fact, Brazil’s president, Luiz Inácio Lula da Silva, urged BRICS countries to develop a new currency and move away from the dollar. In the words of Luiz Inácio Lula da Silva, as reported by The Financial Times,
“Why can’t we do trade based on our own currencies?”
For the US currency, this is a point of concern as it opens the door for more currency options in trade for the entire world. Despite this, assuming the US dollar will eventually step down as the world’s top reserve currency is still a far-fetched theory. As of 2024, the US dollar still remains the number one currency in the world in terms of power.
According to the IMF data, 58.4% of the total global foreign reserves in Q4 2023 were in US dollars, which makes around $6.687 trillion. However, compared to the global foreign reserves in 2000, the share of the US dollar in foreign reserves has declined from 71% to 58.4% in 2022, according to the FEDA. However, it still far surpassed all other currencies, including the Euro (19.98%), Japanese yes (5.70%), and Pounds Sterling (4.84%). In other words, the US dollar has no close competition — dollarized countries, and those pegged to the US dollar, remain at an advantage.
Some of the top financial institutions, such as JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), and Wells Fargo & Company (NYSE:WFC), are key players in facilitating transactions involving other currencies.
JPMorgan Chase & Co. (NYSE:JPM), the largest multinational finance company in the US, had $3.875 trillion in assets and $303 billion in stockholders’ equity as of March 2023. With over 4,800 branches and 15,000 ATMs nationwide, JPMorgan Chase & Co. (NYSE:JPM), offers consumer, business, and investment services. As one of the leading providers of foreign exchange worldwide, J.P. Morgan processes payments in over 120 currencies and receives in more than 40. According to the data shared by J.P. Morgan’s Corporate and Investment Bank, between 2017 and 2022, 47% of total global currencies were converted into the US dollar.
Meanwhile, Bank of America Corporation (NYSE:BAC), the second-largest bank in the US, reported total assets worth $3.180 trillion as of December 31, 2023. The company has over 3,700 branches across the US and numerous international locations, offering various financial services to individuals and businesses. According to Federal Deposit Insurance Organization data, as of December 31, 2023, Bank of America Corporation (NYSE:BAC) reported $1.90 trillion domestic deposits.
On the other hand, Wells Fargo & Company (NYSE:WFC) is the fourth-largest bank in the US. As of December 31, 2023, the company had $1.73 trillion in consolidated assets and $1.706 trillion in domestic assets. On February 29, 2024, Bank of America Corp.’s (NYSE:BAC) Merrill Lynch and Wells Fargo & Company’s (NYSE:WFC) brokerage unit announced to offer access to exchange-traded funds (ETFs) that directly invest in Bitcoin, reported via Bloomberg Law. The main development for this decision came from seeing the record one-day inflow of BlackRock’s (NYSE:BLK) ETF reaching $612 million on February 28, 2024, which was greater than any other ETF of Blackrock (NYSE:BLK).
20 Countries Using the US Dollar as Currency (Or Pegged to It)
Our Methodology
For our list of countries using the US dollar as currency or pegged to it, we have utilized the latest data from the International Monetary Fund’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER). To shortlist the top countries for our list, we have considered the GDP of each country. For this, we once again consulted the IMF’s database.
Note that the United States and US territories use the US dollar as their official currency. However, for our list, we have not considered the United States, and also, given their GDP none of the US territories have made it to our list. If you would like to see the complete list of the countries that use the USD as their official currency, check out our recent article: 16 Countries that use the US Dollar in the World.
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20 Countries Using the US Dollar as Currency (Or Pegged to It
20. Nicaragua (Pegged)
GDP: $18.83 billion
Ranked 20th, Nicaragua is a Central American country, known for its majestic natural landscapes. The official currency of the country is the Nicaraguan Córdoba, which is also sometimes referred to as a peso. The córdoba is one of the only 3 currencies that have a crawling peg arrangement with the USD.
19. Guyana (Pegged)
GDP: $21.18 billion
Guyana is a small country in South America, blessed with abundant natural resources. Its national currency, the Guyanese dollar (GYD), is pegged to the US dollar in a stabilized arrangement with an exchange rate of 207.87 GYD = US$1.
18. Trinidad and Tobago (Pegged)
GDP: $28.37 billion
With its official currency, the Trinidad and Tobago dollar (TTD), being pegged to the USD in a stabilized arrangement, Trinidad and Tobago ranks 18th on the list. It is a dual-island country in the Caribbean, located near Venezuela.
17. El Salvador
GDP: $35.33 billion
El Salvador, located in Central America, is a dollarized country and uses the US dollar as its official currency. In 2021, El Salvador also introduced Bitcoin as its official currency alongside USD, becoming the first country in the world to do so.
16. Honduras (Pegged)
GDP: $37.35 billion
Ranked 16th, Honduras is a Central American country, and according to the CIA, it is one of the poorest countries in Latin America. The official currency of the country is Honduran lempira, and it is pegged to the US at a crawling band arrangement.
15. Cambodia (Pegged)
GDP: $45.15 billion
Located in Southeast Asia, Cambodia is best known for its scenic locations, especially Angkor Wat, a UNESCO World Heritage Site. The official currency of the country is the Cambodian riel, but within the country, the US dollar is used in most transactions. The riel has a stabilized exchange rate arrangement with the USD.
14. Bahrain (Pegged)
GDP: $46.79 billion
Bahrain, a Middle Eastern country, is also one of the top countries that have their official currencies pegged to the US dollar. The official currency of the country is the Bahraini dinar, and it was officially pegged to the USD in 2001.
13. Bolivia (Pegged)
GDP: $49.33 billion
Bolivia, a country in South America, has an “incomplete Crawling peg” system in which the exchange rate is fixed but undergoes micro-readjustments that are not pre-disclosed to the general public. Since October 2011, Bolivia has had a fixed exchange rate of selling 6.96 Boliviano (Bs) for US$1 and buying 6.86 Bs for US$1.
12. Jordan (Pegged)
GDP: $53.57 billion
Jordan is a Middle Eastern country with the Jordanian dinar (JOD) as its official currency since 1950. In 1995, Jordan officially pegged JOD to the US dollar at a fixed exchange rate of 0.71 JOD per US$1.
11. Turkmenistan (Pegged)
GDP: $81.9 billion
Located in Central Asia, Turkmenistan is an upper-middle-income country, best known for its archaeological ruins and stops along the Silk Road. The Turkmenistani manat (TMT) is its national currency and is pegged to USD at a fixed rate of US$1 per 3.49 TMT.
10. Panama
GDP: $87.35 billion
10th on the list, Panama, a country in Central America, has the Panamanian balboa (PAB) as its national currency. However, since the country was incepted in 1904, the Panamanian balboa has been pegged to the US dollar at 1 PAB = US$1. Moreover, the government of Panama stopped printing the Panamanian balboa banknotes and now only the US dollar notes are the legal tender in the country.
9. Venezuela (Pegged)
GDP: $102.33 billion
A country in South America located on the northern coast of the region, Venezuela is best known for its natural attractions and oil reserves. The country’s official currency is the Venezuelan bolívar, which is pegged to the US dollar.
8. Oman (Pegged)
GDP: $108.93 billion
Oman, a country in the Middle East, is an open and oil-dependent economy. The country pegged its official currency, the Omani Riyal (OMR), to the US dollar at a fixed exchange rate, which has remained unchanged, since 1986, at $2.6 per OMR.
7. Ecuador
GDP: $121.59 billion
Ecuador, located in South America, is the topmost country that uses the US dollar as its official currency. The US established relations with the country in 1848 following the withdrawal from its federation with Colombia.
6. Qatar (Pegged)
GDP: $244.69 billion
With a GDP per capita of $119,148, Qatar is the richest country in the Middle East and the fifth-richest in the world as of 2024. On July 9, 2001, the Emir of Qatar, Hamad bin Khalifa Al Thani, pegged the Qatari riyal (QR) to the US dollar at a fixed exchange rate of QR 3.64 = US$1 and formally established it into Qatari law.
