Currency Act than what was taxed out of circulation, the currency depreciated in relation to the British pound sterling. The resultant inflation was harmful to merchants in Great Britain, who were forced to accept the depreciated currency from colonists for payment of debts. The Act limited the future issue of bills of credit to certain circumstances. It allowed the existing bills to be used as legal tender for public debts (i.e. paying taxes), but disallowed their use for private debts (e.g. for paying merchants). The Currency Act 1764 (4 Geo. III c. 34) extended the 1751 Act to all of the British
Currency substitution Currency substitution Currency substitution or dollarization is the use of a foreign currency in parallel to or instead of the domestic currency. Currency substitution can be full or partial. Most, if not all, full currency substitution has taken place after a major economic crisis, for example, Ecuador and El Salvador in Latin America and Zimbabwe in Africa. Some small economies, for whom it is impractical to maintain an independent currency, use those of their larger neighbours; for example Liechtenstein uses the Swiss Franc. Partial currency substitution occurs when residents of a country choose to hold a significant share of their