currency union

Definitions

Economics

  • A group of countries that agree to peg their exchange rates and to coordinate their monetary policies so as to avoid the need for currency realignments.

Forex

  • The utilization of one currency by more than one country through a formal or informal agreement with the issuing authority. Currency unions occur when the sharing of currencies produces greater economic efficiencies for the countries involved even though they maintain separate economic spheres of influence.
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