What currency is used in Micronesia? Is it rocks? Shells? For those of us that live in Micronesia, this is a no-brainer. For some, who may have never even heard of these beautiful tiny islands, it may be a big mystery.
The quick answer is the U.S. Dollar. How we came about using the U.S. Dollar is one interesting story.
If we go back in time and look at the first currency used in Micronesia, Yap's stone money would be the most well known. This is interesting because they were actually brought in from a quarry in Palau, approximately 452 km away and amazing because some of the stone money was up to 4 meters or 13 feet in diameter. Some even weighing up to 8,000 lbs! The transportation alone would validate their value!
But, let's get back to how the U.S. Dollar became the currency of the Micronesian region.
Before the U.S. Dollar was king, these islands were ruled by the Japanese. The Japanese yen was king from after the first World War, to their defeat in the Second World War.
Before the yen was king, the Deutsche mark was the standard in Micronesia, but that's another story. I just wanted to illustrate that currency in Micronesia has changed over the years. To read an interesting story from the German times, click Sokehs Rebellion.
Back to the defeat of the Japanese in the Second World War. Micronesia was put under the control of the U.S. Navy and for several years this area was run by Naval Governors, then the Trust Territory of the Pacific Islands, a UN mandate, with the US administering the islands came in. The U.S. Dollar, of course, became the currency of the administering entity, the US of A.
Our relationship with the U.S. matured in 1986 when we became a sovereign nation, in a Free Association with the U.S. This Free Association guaranteed that the U.S. Dollar would remain our currency for as long as this Free Association exists between our two countries. This would probably come to mean, almost forever. For more on this important association, click here.
Currently, the U.S. Dollar is the currency for the Micronesian countries of the Federated States of Micronesia (also known as Micronesia), Republic of the Marshall Islands, and the Republic of Palau. The other two sovereign countries in the Micronesian region (Republic of Nauru and Republic of Kiribati) use the AUD or Australian Dollar, that's another story as well. The U.S. colony of Guam and U.S. Commonwealth of the Northern Marianas Islands obviously uses the U.S. Dollar.
So, that is the quick and dirty of how we in Micronesia came to use the U.S. Dollar as our currency.
May the U.S. Dollar reign for a thousand years! :)
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