Currency unions involve multiple countries adopting a common currency, either formally or informally. In formal currency unions, like the Eurozone, member nations use a shared currency managed by a central authority, promoting economic integration and stability. Informal currency unions involve countries using a foreign currency for transactions, either alongside or instead of their national currency, often driven by economic considerations, historical ties, or trade facilitation. Currency unions aim to simplify transactions, enhance economic cooperation, and reduce exchange rate uncertainties among participating nations.
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