Iceland Wants to Switch to the Canadian Dollar

#Money

Fri, Mar 2nd, 2012 21:00 by capnasty NEWS

Icelandic investor Heidar Gudjonsson believes that the Canadian dollar is "the most economically convenient currency for Iceland to adopt" since Arctic countries have co-dependent economies and would benefit from a unified currency. Tell you what: if they give us Björk we'll throw in Nickelback for free.

From the article on The Huffington Post:

Canada's currency has developed a very positive reputation around the world, thanks to its solid run-up in value in recent years -- largely due to energy exports -- and due to the perception that Canada avoided the financial crisis that hit banks in the U.S., U.K. and elsewhere.

For Canada, having Iceland use the loonie would likely have little effect. Canada's economy was valued at $1.8 trillion in 2011, while Iceland, with a population of around 315,000, had an economy of around $14 billion. Canadian policymakers would barely have to take into account Iceland's use of the loonie when setting policy.

The Bank of Canada reflected this reality when it previously said it had no problem with Iceland adopting the Canadian dollar.

But it's for that same reason that Canada's ambassador to Iceland is expected to warn Icelanders that adopting the loonie can come with risks.

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