Why not a unified ubiquitous currency across the globe? Is it even pragamtic? For it happen, then concepts namely hedging, forex risk @ exchange loss shall find places in history books. Recapitulate, our introduction to the concept called barter system in history books. Worthwhile to mention, barter was the sole system of exchange during erstwhile periods. The system is not extinct, barely exists – in current days. The caveats of barter – prominently, teleporting commodities to the place of transfer has been eradicated with currency system pioneered across the globe. Give a thought on whether the prevalent system is caveat free???
Squeeky clean, nay. The value of notes in circulation are solely determined by the respective regulator of the jurisdiction. Owing to the presence of multiple power centres (monetary regulatory authorities), policies are inordinately driven by self – centred motives (nation-specific objectives). Utilitarianism exists in theory / objects of every country, but hardly practised. For instance, fed rate tweaks have cascading effects. Inherently, a nation shall prioritise the expectations arising within its contours. Geopolitical organisations like IMF (International monetary fund), world bank exist in form to mediate such issues, but their efficacy is questionable, since their control stands vested with the country funding them, substantially. Wider the spread between exchange values of two currencies, wider would be the trade deficit. Naturally, trade deficit for country A, tantamounts as trade surplus for country B. The disparity in exchange value stands as a persistent widener of the trade differences between such nations. Over a period of time, when disparity avalanche gathers – the outcome is exuded in the form of economic sanctions, visa curbs and eventually wars. Albeit, nuclear wars have become a matter of past hitherto; post the treaty banning usage of nuclear weapons. A treaty prohibitng biological wars is a lynchpin, considering the present scenario.
Getting back to pragmatism of a unified currency – the Euro zone stands as a quintessence for it. Unrestricted flow of trade & people between the members of EU (European union) has proved beneficial in numerous ways. Exchange losses are no longer incurred (between EU members), owing to the adoption of a unified currency “EURO”. Since, transactions of 27 nations take place substantially through Euros, the Euro has gained impetus both in value and circulation terms. Infact, Euro is the second widely held reserve currency accross the globe. With the befalling of brexit, the mighty of EU stands pruned.
Japan bears the torch for adoption of virtual currencies. Bitcoins have been offically recognised as money and virtual yen is gaining popularity. Presently, virtual currencies are predominantly traded for investment purposes. Remarkably, the value of a unit of certain virtual currencies surpass, the earnings of an average person. Their adoption (legally) and acceptance, globally might result in a radical change in the system of exchange.But questions “how” and “when” apropos their adoption & acceptance stands open ended…..