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All of us have at least once imagined what would happen if the world imposed a single currency for executing any kind of financial activity. These thoughts are even more intense when we think about the crazy exchange rates when we want to travel or transfer money abroad. The rates are dramatically high and abolishing the different currencies might help the process to make it easier for not only us but the financial institutions as well. However, there is not a unique idea about this argument and we cannot say that adopting the single currency is not only good or bad.
One world currency - disadvantages
When we talk about the need for unbiased actions from the central bank, some countries would still benefit more than the other ones. The ultimate examples are not any further than Germany and the EU. Germany was having a strong economy even before adopting the EU however, the german products for the other European countries were not as attractive. After the imposition of the Euro, which was a more devalued currency than the existing Deutsche Mark, German exports became very appealing. This is why the German economy prospered even further than the last several years. Other countries, especially in south-eastern Europe, could not devalue their currencies and make their products attractive, which directly caused the dwindle of exports and soaring debts.
Benefits of the single currency
We can talk a lot about the benefits of the implementation of a single currency market all over the world. There are a lot of details to consider and it might need quite a bit of time, however, the clear benefits are vivid.
When there are important advantages of implementing the single currency market, the arguments of the other side are also valid. Unfortunately, the pros of creating a single currency market do not outweigh the cons of the same action.
Summing It Up
Finally, to sum up, after discussing, both the pros and cons of the single currency market, it is vivid that the world economic conditions are not organized the same way to make the single currency world work effectively. However, it does not mean that the discussion about it and working on creating a better solution should be terminated.
After hard work and many years, the alternative in the form of cryptocurrencies has emerged that guarantees fast, cheap and easy transactions, which has the potential to replace forex transactions. However, due to the fact that there is no shared agreement from the governments’ side, where and how the cryptocurrencies might be used, the further implementation of them in our everyday lives is still under the question mark.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Alex Kreger Founder & CEO at UXDA
22 August
Nick Green Director at Purple Patch Broking Ltd
Priya Kumari
20 August
Oleg Stefanet Chief Risk Officer at payabl.
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