Spending Foreign Money

I’m given to understand that a lot of business around the US-Canada border, on both sides, will accept US dollars and Canadian dollars at 1:1 exchange rate.

Do business near the Mexico border operate on the same principle - which is to say, accepting pesos or dollars (though the 1:1 exchange rate wouldn’t work out, obviously)?

Further, do governments have any say on how their money is spent outside of their borders? Could a major American retailer (say, Wal-Mart) begin accepting British pounds, just for shits & giggles, or would the British government try to put a stop to it?

Further to the further, could a government of an independent nation say “Fuck it. Our currency is worthless; from now on all business is conducted in US Dollars.” Could Washington try to put a stop to it?

No, and in fact several other countries already use the US dollar as their official currency. Others use the euro and a few other currencies are also used. See the Wikipedia article on dollarization.

I’m not in a position to give an authoritative answer to this, but it is my understanding that the United States has no interest in curtailing foreign use of it’s currency. In fact, it profits substantially from this phenomenon (There is doubtless a word for it, but I don’t know it, nor do I know exactly how it profits. I believe, however, that it also presents a significant (if, at this point, hypothetical) danger. If everyone in the world looked to exchange their dollars, we might have a problem.

The word is Seigniorage, and the profit comes from the country producing the money getting an interest-free loan from the people owning the money.

I have seen this in both Tijuana, BC (Baja California) and Vancouver, BC (British Columbia), mostly in the tourist areas. The exchange in Canada isn’t always 1:1. It’s usually at a slightly worse exchange rate than you’d get at the bank, in order to make it profitable enough for the merchant to be worth the bother. In both Canada and Mexico, they usually accept bills only and provide change in the local currency, though I have seen exceptions. In Bellingham, WA, a few places in the mall accept Canadian bills, too, though I never saw anyplace in San Diego that would take Mexican money. I am forever getting US coins in my change here in Canada, including (once) a Sacajawea dollar coin.

Places on the border between Northern Ireland and the Republic of Ireland take both euro and sterling. Depending on which way the exchange rate is going, some of them do a 1:1 exchange, which (for the people with the higher value currency) is more of a convenience fee.

Some large retailers in London and other tourist spots take euro too.

I vacationed in Costa Rica, and US dollars were accepted just about everywhere that I tried to use them. I would pay in US and get Costa Rica as change. A few places had to look up the exchange rate and use a calculator though.

Been in many foriegn countries, not USA. I normally started with US dollars, made my purchases, any change was in local money. The best exchange rate was at a bank.

In case it would be unclear : it costs (almost) nothing to print the money. And some other country is willing to take it for the value of $1 to use it internally or in its business with other countries (and those dollars aren’t circulating within the USA, so it doesn’t change the money circulating nor cause inflation).

It’s only a loan, not a net gain of $1 because those other countries could stop using dollars locally or in international trade at any point, and then, they would want to get rid of their dollars (for instance, by buying American stuff with them) which would then probably get withdrawn from circulation or else cause inflation.

That’s why the US$ dollar not being used anymore in, for instance, the oil trade would have catastrophic results (billions upon billions of dollars of useless dollars would suddenly reappear on the exchange markets)

Beyond the Dollar and Euro, I have seen UAE Dirhams used in Yemen as a semi-common alternative to the Yemeni Rial.

The trend on the American side (here in Michigan, non-tourist) has lately been more and more businesses refusing to accept Canadian cash, whereas in the past accepting it was prevalent. On the other hand, I’ve never had a problem using US cash anywhere between Sarnia and the GTA or between Windsor and the Niagara area. Of course the change is always Canadian, as it should be.

I don’t know if US-side Mexican border areas take pesos. I have to imagine that some of them do, but US border cities are usually crap holes that I don’t spend a lot of time in (I wish I could have spent more time in El Paso, though). Of course in Mexican border cities, US dollars are almost never refused. Sometimes prices are quoted in dollars instead of pesos, even when you speak Spanish excellently. The same goes for non-border tourist cities as well.

In the case of Mexico, lots of high-end transactions are performed in dollars instead of pesos. Mexican soccer players might receive pesos in their direct-deposit accounts, but their contracts are in dollars. Higher-end property is almost always exchanged in dollars.

This is also the reason the US Mint is producing all of those quarters of the 50 states, and now National Parks. Every quarter that someone squirrels away is a free loan to the government. The coins will never be worth more than face value, but if 5 million people stash them away, it adds up.

I’m currently in Cancun and spending dollars is easier than spending pesos in some places.

It’s annoying though because some places it is completely streamlined and in other places it’s a pain in the arse and/or a rip-off using Euro in NI. Derry and Newry both profess to be Euro-friendly but in neither city did I find it universal that Euro was accepted.

The ferries between Sweden and Finland take both SEK and EUR and I wouldn’t have minded if they used a straight 1:10 exchange rate (they would still make a profit on Swedes using SEK), but they charge you something like 4 EUR/42 SEK for a beer, which means loads of Swedish 1 SEK coins to handle unnecessarily.

How does that work w/r/t the exchange rate? On payday, does he just receive whatever fraction of his contract is due (say his paycheck each week is $10,000US) at the current dollar/peso exchange rate (so this week he may get 110,488 pesos, and next week he may get 99,221 pesos)?

In Europe, Montenegro and Kosovo have unilaterally adopted the euro as their currency. They are not part of the euro-currency area.

Also, the “micro-states” Andorra, Monaco, San Marino and Vatican City have also adopted the euro by agreement. This reflects their strong links to adjacent euro zone countries, although they are essentially independent entities.

Yeah, I found that in some cafes and restaurants I went to in Newry. Sainsbury’s in Newry, however, was so set up for it they had split tills.

I’d say it is because they didn’t have any currencies of their own. Monaco used the French franc, San Marino and the Vatican used the Italian lire and Andorra used (I assume) the Spanish peseta.

In Britain Euros are usually accepted by most shops (I don’t know if they’re legal tender), but don’t get used very often. Scottish banks notes (which include a £1 note which the rest of Britain’s phased out in favour of coins) aren’t legal tender, but are generally accepted south of Hadrian’s wall (but this becomes less likely the further you go).