TED Conversations

Edward Gonzalez

This conversation is closed.

Creating a global currency

Government currency as we know it today is a perceived value. We work and are paid based on the perceived value of our work. We pay for products on the perceived value of those products or services. When an economy or government experiences trouble the perceived value of their currency is impacted as well. This can be dissuaded by establishing a global currency. With the advent and growing use of Bitcoin, how long before currency comes in only one form. The Euro is a great example on how many countries can agree to work on one standardized form of currency. With the increase of trade among nations and the internet making it easier for consumers to buy products online developing a standard global currency makes sense.

Share:

Showing single comment thread. View the full conversation.

  • Aug 8 2013: While theoretically possible according to very basic economic models, a global currency is highly unlikely, if not impossible for a numer of reasons. As Vincent said, with a global currency, there would cease to be individual economies in the same way there are now. The system would become increasingly volatile and shocks or recessions in one region could quickly create a large scale global crisis. Also, as the currency market underpins the financial sector, moving towards one currency would essemtially destroy the financial market which would then obviously have huge flow on effects. Trade would become increasingly difficult, especially for poor, or predominantly importing countries. Essentially, a global currency would force a much larger gap between developed and developing nations and exacerbate the prevalence and severity of crises.

    More importantly though are the political requirements underpinning a global currency. As the US is currently the global hegemon, it is exceptionally unlikely they would relinquish the dollar as it would significantly reduce their economic dominance and subsequently global power. A global currency would require an unprecedented level of cooperation between states, as well as the establishment of some form of overseeing body which would regulate the entire system and ensure adherence. It is highly unlikely that any state would agree to a global currency as it is not of benefit to their people.

    Rather than being an evolutionary step in the currency system, a shift towards a global currency would essentially involve the evolution of society into a different form.
    • Aug 8 2013: The Euro did not eliminate individual economies of Europe.
      • Aug 8 2013: No, but it did change them as they no longer had economic policy autonomy, which reduced the capacity for individual economies to respond to shocks.

Showing single comment thread. View the full conversation.