Argentina’s president-elect Javier Milei, a self-described ‘anarcho-capitalist’, has threatened to disband his country’s currency, the peso, and adopt the US dollar in its place.

Argentina has been grappling with hyperinflation for a long time – it was above in November 2023. Milei has argued that dollarisation of the Argentine economy will bring inflation down, and usher in a stable climate favourable for investment. How exactly does dollarisation work? What are the risks it entails? And what has been the experience of countries such as Ecuador which have already tried it?