The region known as the British West Indies included British Guiana on the South American mainland, British Honduras in Central America, Bermuda, The Bahamas, and Jamaica, along with its former dependencies of the Cayman Islands and the Turks and Caicos Islands. It also included the Eastern Caribbean territories of Trinidad and Tobago, Barbados, the Windward Islands and the Leeward Islands.
From the early 19th century to the later 20th century, the region generally used sterling coinage, although there was quite widespread usage of mixed sterling and dollar accounts. In the later 20th century there was a move towards dollar accounts in all the territories, in conjunction with the introduction of decimal fractional coinage.
Early history
Queen Anne's proclamation of 1704 the first attempt to introduce the pound sterling currency system to the British West Indies; however it failed to displace the existing Spanish dollar currency system right up until the great silver devaluation of 1873. In addition to the Spanish dollars and gold doubloons, the British government coined 1/4, 1/8, and 1/16 fractional "Anchor dollars" in 1822, for use in Mauritius and the British West Indies, but not including Jamaica.
The next move to introduce British sterling silver coinage to the colonies came with an imperial order in council dated 1825. This move was inspired by a number of factors. By that time, the United Kingdom was operating a very successful gold standard in relation to the gold sovereign that had been introduced in 1816, and there was a desire to extend this system to the colonies. In addition to this, there was the fact that the supply of Spanish dollars ("pieces of eight") had been cut off as a result of the revolutions in Latin America, where most of the Spanish dollars were minted. The last Spanish Dollar was in fact minted at Potosi, Jamaica in 1825. There was also a growing desire to have a stable and steady supply of British shillings throughout the British Empire.
The 1825 order-in-council was largely a failure because it made sterling silver coinage legal tender at the unrealistic rate in relation to the Spanish dollar of $1 = 4 shillings and 4 pence. In 1838, remedial legislation was introduced for the British West Indies, with a new and more realistic rate of $1 = 4s 2d. As a result, most of the British West Indies used sterling coinage from around 1840 until 1955. On the outbreak of the Second World War, the sterling area was created as a wartime emergency measure in order to protect the external value of sterling. All of the British West Indies territories joined the sterling area in 1939, even including British Honduras, which might conceivably have followed the path of Canada and Newfoundland and remained outside the arrangement.
Despite the use of sterling coinage throughout the British West Indies during this period, there was also a mixed usage of sterling accounts and dollar accounts, and there was an eventual move towards dollar accounts in all the territories in conjunction with decimal fractional coinage. This article will chart the circumstances and changes in the individual territories.
British Honduras
British Honduras, renamed Belize in 1973, was the first British colony in the Caribbean area to replace sterling currency with a US dollar-based currency. That occurred in 1885 as a result of the fact that the dollar of neighbouring Guatemala had driven the sterling coinage out of circulation. The authorities wanted to return to the gold standard, and the choice of the US dollar was influenced by growing trade links with New Orleans in the USA. (See the main article entitled the Belize dollar.)
British Guiana
British Guiana, renamed Guyana on independence in 1966, was the only one of the territories in the British West Indies to use dollar accounts in both the public and private sectors throughout the period 1839 to 1950. Although sterling coinage circulated during this period, it did so in conjunction with the Spanish dollar unit of account at the fixed rate of $1 = 4s 2d. Another feature of interest that was exclusive to British Guiana was the special issue four pence (4d) coin known as the groat. (See the main article at Guyanese dollar.)
Bermuda
From 1842 until 1970, Bermuda used the sterling currency as the official currency in both specie coinage and also as the unit of account. (See the main article at Bermudian pound.)
The Bahamas
Unlike Bermuda, the Bahamas, although using the sterling system, both in coinage and as a unit of account, also allowed the US dollar to unofficially circulate alongside the Pound sterling. (See the main article at Bahamian pound.)