Notes and coins in circulation in Iceland has more than doubled as a % of GDP since September 2008. Last data point is January 2012.
Well, ain't that the case in Iceland! Uncertainty of the future is high; unemployment is at historical highs and investment in capital-assets is likewise at is lowest point ever. People urge for liquid assets even though the rate of inflation is currently at 6.3% and the demolition of the purchasing power of notes and coins equivalent, or thereabouts, to that.
Wonder if the proponents of unilateral foreign currency adoption in Iceland consider this? What happens if we don't have the ability to print the cash that the public's liquidity-preference demands?