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Since the country went bankrupt in 2008, Icelanders have been looking to replace the embattled krona for a more stable currency.
According to the Financial Post, the Canadian ambassador to Iceland is ready to begin negotiations over the adoption of the Canadian dollar, the "loonie", to replace the krona on the tiny island nation of less than 350,000 people.
Since the country went bankrupt in 2008, Icelanders have been looking to replace the embattled krona for a more stable currency. Initially, the euro was expected to be adopted but the debt crisis has hampered those plans, according to CBC News.
A recent Gallup poll has suggested that seven out of 10 Icelanders would dump the krona with most respondents favoring the Canadian dollar.
The idea is that by moving to a larger, more stable currency, Iceland would have a better position in international trade agreements.
Supporters of the deal, including members of the Progressive Party of Iceland and some business people and economists cite Canada's stable banking system and relatively low sovereign debt as reasons why the loonie might be a good choice.
Iceland would, however, lose control of its monetary policy and the adoption of a new currency could take years while the Icelandic government buys enough Canadian dollars to put into circulation.
Iceland's RUV media reported Friday, according to CTV News, that the Canadian ambassador will touch on the matter during a speech on Saturday in Reykjavik to opposition party members.
It is expected that the ambassador will say that Canada is open to the idea if Icelanders are serious about the deal.
According to the Toronto Star, the Foreign Affairs Ministry and the Canadian Embassy in Iceland have declined to comment.
The Washington Post pointed out that the unilateral adoption of another currency by a country is not unheard of. In 2000, Ecuador replaced the peso with the US dollar, while Kosovo recently adopted the euro.