As Argentina suffered a severe financial crisis in the late 1980s the newly elected government decided to introduce a currency board system in 1989 to stop the hyperinflation process. Similarly, a currency board arrangement was established in July 1997 as means of stopping the Bulgarian Financial Crisis of 1996/1997. In both countries the currency boards were successful in ending the crises and thus contributed to a higher degree of financial stability in the short-term. However, the breakdown of the Argentine currency board arrangement in early 2002 raised doubts in how far a currency board system is also capable of providing a framework for medium- and long-term financial stability. In this paper we study the circumstances under which the currency boards in Argentina and Bulgaria were established and the development of the economies during the operation of this type of monetary system. After highlighting the reasons for the collapse of the Argentine currency board we make an attempt at judging the adequacy of the Bulgarian currency board arrangement with respect to guaranteeing financial stability in the future.