Now however we have several examples of countries that have dedollarized successfully on the asset and liability sides, including Israel, Poland, Mexico, Egypt, and Turkey. And some signs of declining dollarization are evident in Latin American countries where it seemed that dollarization was impossible to reverse. Could legal restrictions on dollarization speed up the process of dedollarization? Effectively implemented, they could.
But that route should not be tried until the preconditions for macroeconomic stability are in place. And the restrictions are likely to be difficult to enforce. This may be especially the case for unit of account dollarization, where people are likely to find ways to contract in their preferred units despite the law.