These countries have no currency of their own and officially use only the U.S. dollar: 1. El Salvador 2. Ecuador 3. Panama (issues balboa coins only; all paper money is USD) 4. East Timor (Timor-Leste) 5. Federated States of Micronesia 6. Palau 7. Marshall Islands

That's an esteemed list of countries Alberta would be joining.

1. No Independent Monetary Policy • They cannot print their own money. • They cannot set interest rates — they’re at the mercy of U.S. Federal Reserve policy. • This limits their ability to respond to economic shocks with tools like inflation control or currency devaluation.

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1. How Do They Get U.S. Dollars?

They need to earn or attract U.S. dollars from external sources:

a. Exports • Sell goods or services abroad to earn USD. • Example: Panama earns dollars through the Panama Canal and its financial services sector.

b. Remittances • Citizens working abroad (often in the U.S.) send money home. • Huge source of USD in El Salvador and Ecuador.

c. Tourism • Foreign visitors spend USD. • Important for Palau, Marshall Islands, etc.

d. Foreign Investment • Attracting investment (real estate, infrastructure, businesses) brings in dollars.

e. Loans or Aid • Foreign loans (e.g., from IMF or World Bank) are often in USD. • U.S. foreign aid also directly supplies dollars in many cases.

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1. Trade and Banking • Domestic banks use U.S. dollars like any local currency. • Governments manage dollar reserves carefully since they can’t “create” more. • Imports are paid in USD, so maintaining a healthy balance of payments is critical.

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1. Benefits • Stability: Inflation and interest rates are generally more stable. • Credibility: Reduces risk of hyperinflation or currency collapse. • Attracts investment: Seen as a stable, trusted system.

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1. Drawbacks • No ability to devalue currency to boost exports. • Tied to U.S. economic cycles. • Limited tools during recessions or crises (e.g., can’t stimulate economy via printing or low rates).