The Eastern Caribbean dollar (symbol: $; code: XCD) is the currency of all seven full members and one associate member of the Organisation of Eastern Caribbean States (OECS). The successor to the British West Indies dollar, it has existed since 1965, and it is normally abbreviated with the dollar sign $ or, alternatively, EC$ to distinguish it from other dollar-denominated currencies. The EC$ is subdivided into 100 cents. It has been pegged to the United States dollar since 7 July 1976, and the exchange rate is US$1 = EC$2.70.
Six of the states using the EC$ are independent states: Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. The other two are British overseas territories: Anguilla and Montserrat. These states are all members of the Eastern Caribbean Currency Union.
The other two associate members of the OECS do not use the Eastern Caribbean dollar as their official currency: the British Virgin Islands and Martinique. The British Virgin Islands were always problematic for currency purposes due to their proximity to the Danish West Indies which became the US Virgin Islands in 1917. Officially, the British Virgin Islands used to use sterling, but in practice the situation was more complicated and involved the circulation of francs and U.S. dollars. In 1951, the British Virgin Islands adopted the British West Indies dollar which at that time operated in conjunction with the sterling coinage, and in 1959 they changed over officially to the U.S. dollar.
Martinique, as part of France, uses the euro as its currency.
British Guiana and Barbados had previously been members of the Eastern Caribbean Currency Union but withdrew in 1966 and 1972, respectively. Trinidad and Tobago had been a member of the earlier British West Indies currency union, but withdrew in 1964.
The combined population of the EC$ area is about 613,000 (2014 census and estimates ), which is comparable to Montenegro or the American capital city of Washington, D.C.. The combined GDP is 5.46 billion US dollars, which is comparable to Bermuda.
Queen Elizabeth II appears on the banknotes and also on the obverse of the coins. She is the head of state of all the states and territories using the EC$, except for Dominica. Dominica is nevertheless a member of the Commonwealth of Nations which recognises Queen Elizabeth II as Head of the Commonwealth.
Queen Anne's proclamation of 1704 introduced the gold standard to the British West Indies, putting the West Indies about two hundred years ahead of the East Indies in this respect. Nevertheless, silver pieces of eight continued to form an important portion of the circulating coinage right up until the late 1870s. In 1822, the British government coined 1⁄4, 1⁄8, and 1⁄16 fractional 'Anchor dollars' for use in Mauritius and the British West Indies (but not Jamaica). A few years later copper fractional dollars were coined for Mauritius, Sierra Leone, and the British West Indies.
The first move to introduce British sterling silver coinage to the colonies came with an imperial order-in-council dated 1825. This move was inspired by a number of factors. The United Kingdom was now operating a very successful gold standard in relation to the gold sovereign that was introduced in 1816, and there was a desire to extend this system to the colonies. In addition to this, there was the fact that the supply of Spanish dollars (pieces of eight) had been cut off as a result of the revolutions in Latin America where most of the Spanish dollars were minted. The last Spanish Dollar was in fact minted at Potosi in 1825. There was now a growing desire to have a stable and steady supply of British shillings everywhere the British drum was beating. The 1825 order-in-council was largely a failure because it made sterling silver coinage legal tender at the unrealistic rating in relation to the Spanish dollar of $1 = 4 shillings 4 pence. It succeeded in Jamaica, Bermuda, and British Honduras because the authorities in those territories set aside the official ratings and used the more realistic rating of $1 = 4 shillings. The reality of the rating between the dollar and the pound was based on the silver content of the Spanish pieces of eight as compared to the gold content of the British gold sovereign.
A second imperial order-in-council was passed in 1838 with the correct rating of $1 = 4 shillings 2 pence. In the years following the 1838 order-in-council, the British West Indies territories began to enact local legislation for the purposes of assimilating their monies of account with the British pound sterling. Gold discoveries in Australia in 1851 drove the silver dollar out of the West Indies, but it returned again with the great depreciation in the value of silver that followed with Germany's transition to the gold standard between 1871 and 1873. In the years immediately following 1873, there was a fear that the British West Indies might return to a silver standard. As such, legislation was passed in the individual territories to demonetize the silver dollars. Even though the British coinage was also silver, it represented fractions of the gold sovereign and so its value was based on a gold standard.