Ecuador uses the United States dollar as its official currency.
Ecuador adopted dollarization in 2000 after a severe financial and banking crisis. The sucre, which had been the national currency, was replaced at a conversion rate of 25,000 sucres for one U.S. dollar. U.S. dollar notes and coins became legal tender, and Ecuador began issuing its own centavo coins with the same value as U.S. cents.
Dollarization ended the sucre’s role as Ecuador’s circulating currency and was intended to stabilize prices, restore confidence, and reduce exchange-rate risk. The decision was politically and economically significant because Ecuador gave up an independent national monetary policy.
Ecuador is one of several countries and territories that use the U.S. dollar, but it is the only South American country in which the dollar is the official national currency. The U.S. dollar is also widely used in places such as Panama and, alongside another currency, in some other economies.