Country ISO code: IO
Official language: English
Language ISO code: en
Current official currency: United States Dollar (de facto)
Current currency ISO code: USD

Financial History and Currencies of the British Indian Ocean Territory

1. Pound Sterling (GBP) – Official legal currency

• Singular name: Pound Sterling

• Plural name: Pounds Sterling

• Monetary subdivision: 1 Pound = 100 pence

• Fraction name (singular): Penny

• Fraction name (plural): Pence

• Initial production date: Historical currency of the United Kingdom, centuries old

• Status: Official legal currency but rarely used in practice in the territory

• Mint: Royal Mint (United Kingdom)

• Issuing bank: Bank of England

• Minted coin denominations: 1p, 2p, 5p, 10p, 20p, 50p, £1, £2

• Printed banknote denominations: £5, £10, £20, £50, £100

2. United States Dollar (USD) – De facto circulating currency

• Singular name: Dollar

• Plural name: Dollars

• Monetary subdivision: 1 Dollar = 100 cents

• Fraction name (singular): Cent

• Fraction name (plural): Cents

• Initial production date: 1792 (U.S. currency)

• Usage in territory: Primary currency in circulation since the territory's establishment in 1965, especially in the Diego Garcia military base

• Mint: U.S. Mint

• Issuing bank: Federal Reserve System

• Minted coin denominations: 1, 5, 10, 25, 50 cents; 1 dollar

• Printed banknote denominations: 1, 2, 5, 10, 20, 50, 100 dollars

Economic Historical Context

• The British Indian Ocean Territory was created in 1965 from parts of Mauritius and Seychelles colonies.

• The territory is uninhabited by civilians and primarily hosts the joint UK-US military base on Diego Garcia.

• Although the Pound Sterling is the official legal currency, the U.S. Dollar is the de facto currency used for all transactions due to the U.S. military presence.

• There is no civilian economy, local banks, or financial institutions; all financial operations are linked to military administration.

Mints / Production Locations

• Coins and banknotes in circulation are produced by the Royal Mint (UK) and the U.S. Mint, with no local production.

Designs / Symbols on Coins and Banknotes / Abbreviations

• Pound Sterling coins and notes feature British symbols such as the effigy of Queen Elizabeth II and traditional UK denominations.

• U.S. Dollar coins and notes feature U.S. presidents, historical monuments, and national symbols.

Current Circulation Status

• Pound Sterling: Official legal currency, rarely used in practice.

• U.S. Dollar: De facto circulating currency used for all transactions in the territory.

Issuing Authority

• Pound Sterling: Bank of England

• U.S. Dollar: Federal Reserve System

Relevant Monetary Legislation

• The use of Pound Sterling as official currency is defined by UK legislation for overseas territories.

• Practical use of the U.S. Dollar arises from military agreements and the presence of the U.S. base.

This report presents the financial history and current monetary situation of the British Indian Ocean Territory, highlighting the Pound Sterling as the official legal currency and the U.S. Dollar as the de facto currency in circulation since 1965, primarily for military use at Diego Garcia.