Will there ever be a unified currency for the entire world?
Since the inception of currency, people have aspired toward a singular currency recognized and accepted worldwide. However, over many centuries, this ideal remains elusive. What then hampers this notion?
Diving into History
The evolution of monetary exchange is a fascinating journey. The emergence of monetary units was initially linked to the need for a universal equivalent. Initially, various regions used different items as this equivalent: precious and semi-precious stones and metals, animal hides.
However, monetary relations evolved gradually. People realized that exchanges using such diverse equivalents were not always equitable, prompting the standardization of its form. As national currencies emerged, their names were derived from the methods used to acquire this equivalent before their advent.
For instance, the word “ruble” originates from “to chop,” as the Slavic monetary unit initially represented a piece of material from which portions were chopped off. The currency “krona,” prevalent in Sweden, Denmark, Norway, Iceland, Czech Republic, and formerly used in Austria until March 1925, derived its name from the Latin word “corona,” signifying a crown.
Making Projections
Speaking about a unified global currency is challenging due to vast disparities among countries with political, economic, and social contradictions. It’s conceivable that in various economic integration blocs – such as the EU, SCO, EAEU, BRICS – unified currencies or transactions outside of monetary units may facilitate mutually beneficial relationships.
Is a Unified Currency Risky?
A unified currency implies centralization in decision-making for monetary, credit, and financial policies, simplifying and standardizing their development and execution. However, this is essentially the sole advantage while preserving administrative and political autonomy.
Subsequently, downsides emerge. A unified currency entails a singular price scale, uniform inflation across the board, and approximately equivalent living standards. However, achieving such objectives is unattainable without forming a single state.
In this context, the EU serves as an illustration: 27 countries share a single currency, yet there exist 27 different standards of living, 27 levels of inflation, substantial variations in wages, pensions, and social benefits. Attempts to establish a unified concept lead to crises, disputes, mutual resentments, and impoverishment of the populace.
But What if There’s a Strong Desire?
Introducing a unified currency requires the abandonment of national states, sparking a global conflict.
Yet, such measures shouldn’t be taken, as it might result in a lack of money altogether, leaving nothing to purchase. Animal hides, precious, or semi-precious stones and metals would likely reemerge as universal equivalents (provided they can be procured).
Drawing Conclusions
The introduction of a unified currency is an unattainable good in the foreseeable future.