Which countries use dollars as their currency?

The word “dollar” is used by more than 25 currencies worldwide.¹ Some countries use the US dollar (USD); other countries issue their own dollar currencies, such as the Canadian dollar (CAD) or East Caribbean dollar (XCD).

This guide breaks down which countries use the dollar, where the US dollar is used specifically, and what that means if you’re sending money from the UK, spending abroad, or converting between dollar currencies.

Understanding the different dollars around the world

There are 2 main types of dollar currency. Some countries use the US dollar (USD) as their official currency, while others have their own dollar currencies, such as the Canadian dollar (CAD), Australian dollar (AUD), or Singapore dollar (SGD).¹

Even though USD, CAD, AUD, SGD, and XCD all share the same dollar symbol ($), they are separate currencies, each with its own value, central bank, and exchange rate.

Is the US dollar the same as other dollars?

No. The US dollar is one of the strongest currencies in the world, issued by the United States.² Other dollar currencies are separate national or regional currencies. They may share the same name, but they do not have the same value or the same issuer.

For a look at currencies at the other end of the scale, you can check out our guide to the weakest currencies in the world.

Why do so many countries call their currency the dollar?

The name “dollar” originated from the German word "thaler", a silver coin first minted in Joachimsthal in Bohemia in the early 16th century. As the word moved across languages and trade routes, it changed over time but stayed linked to silver coins in different currencies. In English, it eventually became the “dollar”.

That broader use of the dollar helped the name stick. In the early United States, Spanish pesos were widely used in trade and often referred to as dollars. The US later adopted the dollar as its official currency, and other countries eventually used the name for their own currencies too.³

The shared dollar name in different countries is purely historical and does not mean these currencies have the same value or work in the same way today.

Countries that use the US dollar (USD) as official currency

A small number of countries use the US dollar as legal tender or as an official currency. They include Ecuador, El Salvador, Marshall Islands, Micronesia, Palau, Panama, and Timor-Leste.⁴

This section focuses on the best-known examples, along with the US territories where USD is also the official currency.

Official dollarisation: Ecuador, El Salvador, and Zimbabwe

Official dollarisation is when a country adopts the US dollar as an official currency instead of relying on a national one of its own. Ecuador, El Salvador, and Zimbabwe are often grouped together here, but they each arrived at that point for different reasons.

Here is a quick overview:

• Ecuador adopted the US dollar in January 2000 after a financial crisis and a sharp collapse in the value of its former currency, the sucre.⁴
• El Salvador followed in 2001, when it introduced the US dollar alongside the colón and later made it the main currency in everyday use.⁵
• In Zimbabwe, foreign currencies including the US dollar began to replace the local currency after extreme inflation made the Zimbabwean dollar unusable.⁶

The path was different in each case, but the pattern is similar. The US dollar tends to take hold when trust in the local currency weakens, or when governments want a more stable monetary base than a domestic currency can provide.

US territories that use the US dollar

The US dollar is also the official currency in the 5 inhabited US territories:⁷

• Puerto Rico
• Guam
• American Samoa
• US Virgin Islands
• Northern Mariana Islands

Since these territories are part of the US, they use USD currency in the same way as the mainland US for everyday payments and pricing.

US dollar in Panama and Timor-Leste

Panama and Timor-Leste both use the US dollar, but for different reasons.

Using the dollar in Panama goes back more than a century. The country has used the US dollar since 1904, a year after becoming independent in 1903, while its own currency, the balboa, remains pegged to the dollar at a one-to-one rate and is mainly issued as coins.⁹

Timor-Leste adopted the US dollar after independence as a practical way to bring stability to its new monetary system. The US dollar is its official currency, although the country also issues local centavo coins for small change.¹⁰

In both cases, the USD became part of the monetary system for stability. However, Panama’s arrangement comes from a long-standing history, while Timor-Leste’s is tied to state-building after independence.

Save money when spending in dollar currencies

Not every country that uses the word "dollar" uses the same currency. Whether you're paying in US dollars, Canadian dollars, Australian dollars or another dollar currency, using the right payment method can help you avoid unnecessary conversion costs and make spending abroad simpler.

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Countries with their own national dollar currencies

Not every country that uses the word dollar uses USD. Some countries issue their own national or regional dollar currencies, with their own central bank or monetary authority, exchange rate, and value.

This section looks at 6 of the best-known examples: the Canadian dollar, Australian dollar, New Zealand dollar, Singapore dollar, Hong Kong dollar and East Caribbean dollar.

The Canadian dollar (CAD)

The Canadian dollar is Canada’s official currency and is issued by the Bank of Canada.¹⁰ It has a floating exchange rate, which means its value moves with the market rather than being fixed to the US dollar.

Although it shares the dollar name and symbol, CAD is a separate currency with its own exchange rate. Its value often moves in line with wider market conditions and commodity prices, rather than tracking USD directly.

The Australian dollar (AUD)

The Australian dollar is Australia’s official currency and is managed by the Reserve Bank of Australia. Like the Canadian dollar, it has a floating exchange rate, so its value moves with the market rather than being fixed to USD.¹¹

The key point is that AUD is its own currency, with its own value and exchange-rate movements. The Reserve Bank of Australia notes that the Australian dollar has floated since 1983, which means it can rise or fall against other currencies depending on market conditions and the wider economy.

The New Zealand dollar (NZD)

The New Zealand dollar, commonly known as the “Kiwi”, is New Zealand’s official currency and is issued by the Reserve Bank of New Zealand. It has a floating exchange rate, meaning its value is set by the market rather than fixed to USD or AUD.¹²

Like other dollar currencies, NZD shares the name and symbol but operates independently. Its value can move noticeably against other currencies, influenced by global market conditions and New Zealand’s economy, including trade and interest rates.

The Singapore dollar (SGD)

The Singapore dollar is Singapore’s official currency and is managed by the Monetary Authority of Singapore (MAS). Unlike most currencies, it is not managed through interest rates alone. Instead, MAS uses the exchange rate itself as its main monetary policy tool.

This means SGD is allowed to move within a managed band against a basket of currencies, rather than floating freely or being fixed to a single currency like USD.¹³

The key point is that SGD is managed closely, so its value tends to be more stable than many other dollar currencies.

The Hong Kong dollar (HKD)

The Hong Kong dollar is Hong Kong’s official currency issued under the supervision of the Hong Kong Monetary Authority (HKMA). Unlike a freely floating currency, HKD operates under the Linked Exchange Rate System, which keeps it within a narrow range against the US dollar.¹⁴

That means HKD is its own currency, but its value is closely tied to USD, which in practice gives it more stability against the US dollar than fully floating currencies such as CAD or AUD.

East Caribbean dollar variants (XCD)

The East Caribbean dollar is a regional currency used by 8 countries and territories in the Eastern Caribbean, issued by the Eastern Caribbean Central Bank (ECCB).¹⁵

Unlike most other dollar currencies, XCD is pegged to the US dollar at a fixed rate. That means its value does not move freely with the market and stays stable against USD. What makes XCD different is that it is shared across multiple countries and territories, rather than belonging to just one national economy.

Where the US dollar is widely accepted or pegged

The US dollar is not only used where it is the official currency. In some places, it is commonly used alongside local money in everyday transactions. In others, the local currency remains in place but is tied closely to USD.

A pegged currency is fixed to the US dollar at a set rate instead of moving freely with the market. You can read more in our guide to how pegged currencies work.

Countries that accept USD alongside local currency

In some countries, the US dollar is accepted alongside local money. These include:

• Bahamas
• Barbados
• Belize
• Bermuda
• Cambodia
• Cayman Islands
• Costa Rica
• Curaçao
• Guatemala
• Honduras
• Jamaica
• Lebanon
• Liberia
• Mexico
• Myanmar
• Nicaragua
• Saint Kitts and Nevis
• Sint Maarten
• Vietnam

US dollar acceptance in these countries is typically limited to tourist areas, hotels, or certain businesses and varies widely. Using the local currency is generally recommended for everyday transactions.

Fixed exchange rates: Bahamas, Barbados and Belize

​​The Bahamas, Barbados and Belize each keep their own currency, but fix it to the US dollar at a set rate rather than letting it move freely with the market.

• The Bahamian dollar is pegged at 1 BSD = 1 USD.
• The Barbadian dollar is pegged at 2 BBD = 1 USD.
• The Belize dollar is pegged at 2 BZD = 1 USD.

Informal dollarisation in Cambodia and Vietnam

In Cambodia, the US dollar became widely used after years of conflict and large inflows of foreign aid in the 1990s.¹⁶ In Vietnam, it became more common during periods of inflation and low confidence in the local currency.¹⁷

Both countries kept their own national currency, but the US dollar still took on a larger role in everyday transactions.

FAQs about the dollar currency

What is the most valuable dollar in the world?

Among current dollar currencies, the Cayman Islands dollar (KYD) is generally the most valuable against USD at a rate of CI$1 per US$1.20, meaning that one Cayman Islands dollar is worth more than one US dollar.

How many countries use the US dollar?

7 sovereign countries use the US dollar as an official currency, including: Ecuador, El Salvador, the Marshall Islands, Micronesia, Palau, Panama and Timor-Leste.

Which Caribbean countries use the dollar?

The Bahamas, Barbados, Bermuda and the Cayman Islands, plus countries that use the East Caribbean dollar, including Antigua and Barbuda, Saint Lucia, Grenada, Dominica, Saint Kitts and Nevis, and Saint Vincent and the Grenadines.

Can I use US dollars in Canada or Mexico?

Yes, US dollars are accepted in some parts of Canada and Mexico, but they are not the best option for everyday payments. Acceptance is usually limited to tourist areas, border towns and some hotels or shops, and exchange rates can be poor. Using the local currency is usually a better option.

Key takeaways

• More than 25 currencies globally use the name dollar, originating historically from the German word "thaler" linked to silver coins.
• While sharing the same symbol, currencies like the US dollar (USD), Canadian dollar (CAD), and Australian dollar (AUD) are entirely separate legal tenders with unique values and independent central banks.
• A small number of sovereign nations and inhabited territories have officially adopted the US dollar as their main currency, often to establish economic stability after financial crises or inflation.
• Other countries maintain distinct regional or national dollar currencies, operating on either floating exchange rates like the New Zealand dollar or fixed pegs to the USD like the East Caribbean dollar.
• Managing multiple different dollar currencies while traveling or transferring money globally can lead to hidden costs and confusing exchange rate markups. A Wise account helps navigate these complexities by offering mid-market exchange rates and transparent fees when spending or sending money across different currencies.

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Sources used:

1. en.wikipedia.org - Dollar
2. uscurrency.gov - The history of U.S. currency
3. czechcenter.org - Origin of the word "dollar"
4. elibrary.imf.org - Ecuador adopted the US dollar
5. imf.org - El Salvador adopted the US dollar
6. imf.org - Zimbabwe adopted the US dollar
7. home.treasury.gov - US Department of the Treasury press release
8. banconal.com.pa - Official document of ​​Banco Nacional de Panamá on USD use
9. bancocentral.tl - Banco Central de Timor-Leste on the USD dollar use
10. bankofcanada.ca - A history of the Canadian dollar
11. rba.gov.au - Reserve Bank of Australia on the Australian dollar
12. investopedia.com - New Zealand Dollar (NZD) Overview
13. mas.gov.sg - What is MAS’ monetary policy framework
14. hkma.gov.hk - Hong Kong Monetary Authority
15. eccb-centralbank.org - Eastern Caribbean Central Bank currency
16. adb.org Cambodia’s Persistent Dollarisation
17. multiresearchjournal.com – Dollarisation in Vietnam

Sources last checked on date: 31-Mar-2026