Policy Discussion Papers
An Incentive-Compatible Suggestion for Seigniorage Sharing with Dollarizing Countries
Sixteen countries now give the U.S. dollar legal-tender status. Although dollarizing can help emerging market countries gain monetary credibility and avoid currency crisis, many do not want to give up the seigniorage revenues associated with issuing their own fiat currency. This article offers a proposal for seignoirage sharing.
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