Outside of Laos, Lao kip is practically worth nothing. Foreign banks & moneychangers won't accept it. Lao people who need to pay people in other countries for goods & services have to pay them in another currency e.g. USD or THB. Lao people who need to travel to other countries also have to obtain foreign currency before they depart from Laos.

Futhermore, the biggest denomination for Lao kip is 50,000kip. That's barely USD6. A few years ago when the biggest denomination was 20,000kip, it was so troublesome paying for big purchases (e.g. house, motorbike, etc) using Lao kip! & when the bank runs out of big notes...once upon a time BCEL at Talat Sao gave me 1 million kip in a stack of 200 pieces of 5000kip notes...I asked them for rubberbands & a plastic bag :P

Hopefully one day in the future the Lao economy will be strong enough for the kip to become a currency accepted overseas...meanwhile I don't mind having new 100,000kip banknotes.

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The fact that you can't use kip outside of Laos is irrelevant. You can't use many currencies outside the country in which they are issued.

Also, how many times do you buy houses or motorcycles, in most countries you don't buy such things in cash anyway.

If you compare to dollars and earning power in the US the kip makes sense. Average US wage about $100 a day, biggest bill $100. Average (good pay) wage in Laos Fiftty thousand kip, biggest bill 50,000 kip.

To the person who said Laos doesn't make food and one needs to buy Thai food, you've never been to the market. Laos only imports nam pah and M-150.

The kip already is widely used, try buying something with dollars or baht in a small market outside the big town, forget it, kip only.

The biggest thing the government could do would be to print a 100,000 and 250,000 kip note, accept only kip for visa on arrival, and accept only kip for airfare.

One reason many people like Kip now. It's solid, the kip has appreciated against the baht and the dollar both over the past 4 years.

DEATHEP wrote:

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Larger notes are a must!

I wonder if would be possible to create a tax used when a transaction is not done in kip.

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 That would be too much, especially for the locals especially since there is no existing clear policy. Instead why government come up with a policy that all local establishments, except hotels and banking facilities, should not accept other currencies on purchases and transactions other than kips.

I agree with Bannok's idea to have notes with bigger amount so people wont be handling too much bills in their pocket (basically large quantity of kips wont fit in a wallet).