<p>A while ago I asked <a href="https://economics.stackexchange.com/questions/17550/how-do-countries-create-their-own-currencies-and-give-them-meaningful-value">how countries make a currency and give it value</a>, specifically pointing out that I wasn't concerned about when/why such a thing would be done.</p>

<p>Well, now I'm asking the exact opposite. Ignoring how a country would do so, when/why would a country implement a new currency? What are the pros and cons of doing it? And are there differences between large economies and small economies when it comes to this?</p>

CC BY-SA 4.0
2018-05-29T21:47:31.623Z
Let's flip the question around. why wouldn't a country want to issue their own currency? Using someone else's currency means that you are subject to their policy decisions whether you like them or not.
zeta-band
CC BY-SA 4.0
2018-05-30T04:25:22.767Z
Why would a country not want to be in control of their own monetary policy?
EconJohn
CC BY-SA 4.0
2018-05-30T05:20:42.207Z
Ya, I get that at a high level. The problem is that I'm a noob who doesn't understand the details of what "monetary policy" entails. Thus I ask. :)
Tirous
CC BY-SA 4.0
2018-05-30T05:25:45.097Z
Also, if having your own currency is such a "duh", why is the Euro a thing?
Tirous
CC BY-SA 4.0
2018-05-31T18:49:42.660Z
@Tirous The expectation on the Euro was that the reduction in costs and problems given by using one currency was more valuable than the loss of monetary policy flexibility. But as Greece and Spain have shown, the loss of monetary policy control is extremely painful. If Greece was still on the Drachma, they would devalue it to increase exports and decrease imports. But they can't do that, so they have to repay loans in Euros.
zeta-band
<currency>
When/Why would a country want to create its own currency?
Tirous
# When/Why would a country want to create its own currency?

(Asked by: username_0 on 2018-05-29)

A while ago I asked [how countries make a currency and give it value](https://economics.stackexchange.com/questions/17550/how-do-countries-create-their-own-currencies-and-give-them-meaningful-value), specifically pointing out that I wasn't concerned about when/why such a thing would be done.

Well, now I'm asking the exact opposite. Ignoring how a country would do so, when/why would a country implement a new currency? What are the pros and cons of doing it? And are there differences between large economies and small economies when it comes to this?

**Tags:** currency

> **Comments:**
> **username_1**: Let's flip the question around. why wouldn't a country want to issue their own currency? Using someone else's currency means that you are subject to their policy decisions whether you like them or not.  
> **username_2**: Why would a country not want to be in control of their own monetary policy?  
> **username_0**: Ya, I get that at a high level. The problem is that I'm a noob who doesn't understand the details of what "monetary policy" entails. Thus I ask. :)  
> **username_0**: Also, if having your own currency is such a "duh", why is the Euro a thing?  
> **username_1**: @username_0 The expectation on the Euro was that the reduction in costs and problems given by using one currency was more valuable than the loss of monetary policy flexibility. But as Greece and Spain have shown, the loss of monetary policy control is extremely painful. If Greece was still on the Drachma, they would devalue it to increase exports and decrease imports. But they can't do that, so they have to repay loans in Euros.  

---

## 0 answers

