I
107TH CONGRESS
1ST SESSION
H. R. 2617
To promote international monetary stability and to share seigniorage with
officially dollarized countries.
IN THE HOUSE OF REPRESENTATIVES
JULY 24, 2001
Mr. RYAN introduced the following bill; which was referred to the Committee
on Financial Services
A BILL
To promote international monetary stability and to share
seigniorage with officially dollarized countries.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘International Monetary
Stability Act of 2001’’.
SEC. 2. FINDINGS; STATEMENT OF POLICY.
(a) FINDINGS.—Congress finds that—
(1) monetary stability is necessary for strong
long-term economic growth and higher standards of
living;
and this is a significant barrier to official
dollarization;
(8) official dollarization would increase the sei-
gniorage earnings of the United States;
(9) it would be mutually beneficial for the
United States to encourage official dollarization by
offering to share with countries that become offi-
cially dollarized a portion of the extra seigniorage
earnings that the United States would earn; and
(10) encouraging official dollarization com-
plements ongoing efforts by the United States to
strengthen the international financial architecture.
(b) STATEMENT OF POLICY.—It is the policy of the
United States that—
(1) the Federal Reserve System has no obliga-
tion to act as a lender of last resort to the financial
systems of dollarized countries;
(2) the Federal Reserve System has no obliga-
tion to consider the economic conditions of dollarized
countries when formulating or implementing mone-
tary policy;
(3) the supervision of financial institutions in
dollarized countries remains the responsibility of
those countries; and
(4) in the absence of qualification by the Sec-
retary of the Treasury under section 3, countries are
free to dollarize unilaterally.
SEC. 3. QUALIFICATION.
(a) IN GENERAL.—The Secretary of the Treasury (in
this Act referred to as the ‘‘Secretary’’) may qualify a
country as officially dollarized for purposes of this Act,
after consideration of whether the country has—
(1) ceased issuing a local paper currency;
(2) extinguished a substantial portion of the do-
mestic currency in circulation, with plans to extin-
guish as much of that currency as feasible;
(3) granted legal tender status to the United
States dollar; and
(4) substantially redenominated its prices, as-
sets, and liabilities in United States dollars;
(b) OTHER CONSIDERATIONS.—In deciding whether
to qualify a country as officially dollarized under this sec-
tion, the Secretary may consider any additional factors the
Secretary deems relevant.
(c) STATEMENT
BY SECRETARY.—The Secretary
shall issue a written statement on qualification of a coun-
try under this section that explains why the country has
been qualified.
(d) LIMITATION.—The Secretary may not qualify a
United States territory or commonwealth as officially
dollarized for purposes of this Act.
SEC. 4. PAYMENTS.
(a) IN GENERAL.—Beginning with the 1st business
day of the 4th full calendar month after the date a country
is qualified under section 3, the Secretary shall, every 3
months, pay the government of the country an amount
equal to 21.25 percent of D, multiplied by I, multiplied
by P2, divided by P1.
(b) DEFINITIONS.—In subsection (a):
(1) D.—The term ‘‘D’’ means the lesser of—
(A) the dollar amount of Federal reserve
notes the country acquired from the Federal
Reserve 
System 
for 
purposes 
of 
official
dollarization under this Act; or
(B) the dollar value of the domestic cur-
rency of the country in circulation in the coun-
try before the country was qualified.
(2) I.—The term ‘‘I’’ means the average yield
to maturity on 90-day Treasury bills in the most re-
cent 3 calendar month period occurring before the
date of payment under subsection (a), except that if
a 90-day Treasury bill is not issued during the 3-
month period, the Secretary may substitute an ap-
propriate alternative interest rate.
(3) P1.—The term ‘‘‘P1’’ means the nonseason-
ally adjusted United States City Average All Items
Consumer Price Index for All Urban Consumers for
the month falling three months before the most re-
cent month occurring before the date of payment
under subsection (a) for which data are available,
except that if the price measure is discontinued or,
in the judgment of the Secretary, altered in a man-
ner that is materially adverse to the interests of the
United States, the Secretary may, after consultation
with the Bureau of Labor Statistics, substitute an
appropriate alternative index.
(4) P2.—The term ‘‘P2’’ means the nonseason-
ally adjusted United States City Average All Items
Consumer Price Index for All Urban Consumers for
the most recent month occurring before the date of
payment under subsection (a) for which data are
available, except that if the price measure is discon-
tinued or, in the judgment of the Secretary, altered
in a manner that is materially adverse to the inter-
ests of the United States, the Secretary may, after
consultation with the Bureau of Labor Statistics,
substitute an appropriate alternative index.
SEC. 5. PREVIOUSLY DOLLARIZED COUNTRIES.
(a) LIMITATION.—The Secretary of the Treasury
may not make a payment under section 3 to the British
Virgin Islands, East Timor, the Republic of El Salvador,
the Republic of the Marshall Islands, the Federated States
of Micronesia, the Republic of Palau, the Republic of Pan-
ama, or the Turks and Caicos Islands until 10 percent
of the payments made countries not specified in this sub-
section equals or exceeds the total of the payments that
would be made in accordance with subsection (b) of this
section to the countries specified in this subsection on
qualification of the countries.
(b) 
PAYMENT
CALCULATION.—On 
qualification
under section 3 of a country specified in subsection (a)
of this section, the Secretary of the Treasury shall make
payments to the country pursuant to section 4, except that
in applying section 4, the term ‘‘D’’ means an amount
equal to 4 percent of the nominal dollar gross domestic
product for the country, as calculated by the International
Bank for Reconstruction and Development (or other rec-
ognized statistical authority), as of June 1, 2001, for cal-
endar year 1999.
SEC. 6. DISQUALIFICATION AND PAYMENT CANCELLATION.
(a) LIMITATION.—The Secretary shall disqualify, and
cease making payments to, a country under this Act if—