Dollarization: Is It Worth It?

To many analysts the trend toward dollarization was unexpected, since adopting a new currency can be quite costly. One major expense is the loss of seigniorage, the profit that a country earns when it issues a currency. For example, the cost to the U.S. of printing its currency is estimated at less than 0.1% of the currency's face value, yet the notes are sold at face value to banks.