Cambodia where I'm almost at does the same - dollars from the ATMs. Growing 7% a year. Maybe outsourced currency can work as long as you don't let everyone borrow loads and end up as Greece.
The problem with Cambodia being pegged to the USD is that they are subject to the whims of the US economy, rather then in line with the local, regional economy.
Cambodia would be much better off using a neighbour's currency than the USD.
Really? Let's see, we got the Baht, Dong, and...kip (laos is very dollarized also, though). None of those are particularly appealing. You could argue for the Baht maybe.
The only reason the Cambodians are using dollars anyways is (a) no trust for the riel, and (b) a peacekeeping operation in 1993 injected a lot of dollars into the economy, and the people just went with it. It doesn't get anymore organic than that!
Singapore is a city state. I don't think they want to be involved in letting other countries use their currencies! Really, the economy you borrow your currency from has to be huge to support that, so there are really only a few choices: USA, Europe, maybe Thailand could (but it is still quite small), maybe Australia, and of course...China (but RMB doesn't float, so a non starter). Dollars have stability that is on par with gold (or even better, recently), so why not just go with that?
