The commission varies with the size of transactions, and there are usually different rates for various forms of foreign currency transfers. The gains from the elimination of transaction costs are a function of trade flows between members of a monetary union. With high volumes of trade, the gains are substantial.
Furthermore, if the country’s direction of trade was highly diversified, fixing the exchange rate against the currency of only one of the trading partners would not eliminate all the transactions costs. Elimination of exchange rate risks removes the hedging of exchange rates as an argument in a firm’s decisions regarding the geographical concentration of activities.