Military Payment Certificates (MPC) evolved from Allied Military Currency as a response to the large amounts of US Dollars circulating in post-World War II Europe due to American servicemen. The local citizens did not trust local currencies as the fate of their governments was unclear. Therefore preferring a stable currency, dollars, they often accepted payment in dollars for less than the accepted conversion rates. Obviously dollars became more favorable, inflating the local currencies and thwarting plans to stabilize the economies. Contributing to this problem was the fact that though troops were being paid in the local currency they could convert an unlimited amount to dollars at the government set conversion rate, which was much more favorable to the GIs than the market rate. From this a black market developed where the servicemen could utilize the favorable exchange rate.
To combat this the US military devised the MPC program. MPC's were paper money denominated in US Dollars in amounts of 5 cents, 10 cents, 25 cents, 50 cents, 1 dollar, 5 dollars, 10 dollars, and starting in 1968 20 dollars. MPC's were fully convertible to US dollars upon leaving the combat zone ( a designated MPC zone) and convertible to local currencies when going on leave (but not vice-versa), and were illegal for unauthorized personnel to possess, thus, in theory, eliminating US dollars from local economies. Although actual greenbacks were not circulating, many local merchants accepted MPC on par with US dollars, as they knew they could use them on the black market. This was especially evident during the Vietnam War when the MPC program was at its zenith. To prevent MPC from being used as a primary currency in the host country, thereby destroying the local currency value and economy, MPC banknote style would change. Many veterans can recount a conversion day or C-Day.
