Argentina’s new President has promised replacing its own currency ‘Peso’ with ‘US Dollars’.
Benefits:
1) Stable (foreign) Currency which will attract investment and growth
2) As the foreign currency can be earned only through exports (and foreign capital inflows), it would incentivize to promote exports and ease conditions for capital inflows
3) Previous governments could have forced Central banks to print money (monetization of deficit) and spend on wasteful expenditure but in case foreign currency they cant print and Govt. can earn money only through tax and other resources which will prevent inflation.
Negatives:
1) Central banks will loose control on monetary policy and can’t influence the money supply
2) Central banks can’t devalue currency to promote exports.