Walk into any border town like Windsor or Detroit, and you’ll see the friction of money in real-time. Merchants juggle two tills. Commuters check exchange rates like they’re checking the weather. It feels inefficient, right? That’s exactly what sparked the decades-long debate over a North American currency union.
The idea is basically the Euro, but for us.
Imagine a single currency—often nicknamed the "Amero"—replacing the US Dollar, the Canadian Dollar, and the Mexican Peso. It sounds like a conspiracy theory you’d find on a late-night Reddit rabbit hole, but it’s actually been a serious academic and political talking point for years.
Back in 1999, Herbert Grubel, an economist at the Fraser Institute, published a paper titled The Case for the Amero. He wasn't some fringe blogger. He was a respected academic arguing that Canada would benefit from the price stability of a shared currency. He saw the wild swings of the "loonie" as a tax on trade.
But things didn't exactly go to plan.
The Rise and Fall of the Amero Myth
You've probably seen the pictures. Fake gold coins with "Amero" stamped on them. In the mid-2000s, these images went viral, fueling a panic that a secret deal was being inked behind closed doors to dissolve national sovereignty.
Honestly? It was mostly noise.
While the "Amero" coins were actually medals created by artist Daniel Carr, the underlying economic theory—Optimal Currency Area (OCA)—is very real. Robert Mundell, a Nobel-winning Canadian economist, pioneered this. He’s often called the "Father of the Euro." His work suggested that if regions have highly integrated trade, it makes sense to share a coin.
North America is deeply integrated. Canada and Mexico are consistently the top trading partners for the US. We build cars together. We move oil across borders. We share supply chains that are so tangled you can't tell where one country ends and the other begins.
So why hasn't it happened?
Politics. People like their flags, and they like their central banks.
Why a North American Currency Union is a Tough Sell
Think about 2008. Or 2020.
When the economy hits a wall, the Bank of Canada wants to be able to lower its own interest rates. It wants to let the Canadian dollar drop to make Canadian lumber and oil cheaper for the rest of the world to buy. This is called a "flexible exchange rate," and it’s a massive shock absorber.
If we had a North American currency union, Ottawa would lose that power. Decisions would be made in Washington (or a hypothetical North American Central Bank), and what's good for Texas might be terrible for Alberta.
Mexico faces an even steeper climb.
The wealth gap between the US and Mexico is way wider than the gap between, say, Germany and Greece. Merging the Peso with the Dollar would likely cause massive wage shocks. It’s not just about printing new bills; it’s about aligning labor laws, debt levels, and tax codes.
Critics like former Mexican President Vicente Fox once toyed with the idea of a long-term "common market" similar to the EU, but the political appetite in the US is basically zero. No US politician is going to tell their voters they’re giving up the Greenback. It’s the world’s reserve currency. Why would the US share that throne?
Real-World Dollarization
Even without a formal North American currency union, we are seeing "dollarization" by stealth.
Look at El Salvador or Panama. They use the US Dollar. They don't have a seat at the Federal Reserve table, but they use the currency because it's stable. In many parts of Mexico, the Dollar is king for real estate and tourism.
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This is "de facto" union versus "de jure" union.
- One is a choice by the market.
- The other is a treaty signed by heads of state.
We are moving closer to the first one every day, while the second one stays stuck in academic papers.
The USMCA (the "new NAFTA") didn't even mention a common currency. It focused on digital trade and labor rules. This tells you everything you need to know about where the leaders' heads are at. They want the trade, but they want to keep their own wallets.
The "Loonie" Problem
For Canadians, the debate is always about the "brain drain" and purchasing power.
When the Canadian dollar is at 75 cents US, Canadian tech talent looks cheap to Silicon Valley. They get headhunted. If we had a shared North American currency union, that wage gap would be more transparent. Prices would equalize.
But then, Canadian manufacturing would lose its "discount" advantage. It’s a double-edged sword that keeps economists up at night.
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Is the Amero dead?
Probably. As a physical coin, it was never really alive. But as a concept? It lingers because the friction of changing money is a cost we all pay. Every time you pay a 3% "foreign transaction fee" on your credit card, you’re feeling the absence of a currency union.
Moving Forward: What You Can Do
If you’re a business owner or an investor looking at the North American landscape, don’t wait for a single currency. It isn't coming in our lifetime.
Instead, focus on managing the "currency spread."
- Open a USD Account: If you’re in Canada or Mexico, having a US-based or USD-denominated account is the DIY version of a currency union.
- Hedge Your Risk: Use forward contracts if you have large cross-border payments. Don't gamble on the exchange rate.
- Watch the Fed: Regardless of your local currency, the US Federal Reserve is the "de facto" central bank of North America. Their interest rate hikes dictate the flow of capital across the whole continent.
- Accept Multi-Currency Payments: If you sell online, use platforms that allow customers to pay in their local currency while you settle in yours.
The dream of a unified North American currency is a fascinating "what if" of history. It shows how much we trade, but also how much we value our independence. For now, keep your Pesos, your Loonies, and your Dollars separate. Just know that they’re all dancing to the same beat.