Universal Currency Assignment Report

Running head: UNIVERSAL CURRENCY
Universal Currency
Student’s Name
University
Author’s note

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As the world is undergoing a radical shift owing to globalization and free market
economy, the issue of a universal form of currency has taken over the central position of
economic and societal debates. It is often argued that without a universal currency, there is no
possibility of a complete economic integration, which has become the imminent need of the
contemporary world (Kuznetsov 2018). Free trade and special economic zones, aided with
booming information technology and connectivity, are rapidly adopting mobilization of labor,
goods and services across the world (Desai 2013). Hence, the adaptation of a universal currency
is only a matter of time. Although a large section of experts on the fields of economics and
sociology hold such a perspective, there are also several scholars who are strongly opposed to the
idea of a universal form of currency. They maintain not only the proliferation of global currency
is quiet impossible in near future, but also that it would be harmful for the world. To this end, the
present essay seeks to find the positive and negative impacts of universal currency. However,
taking note of the contemporary global situation, the essay hypothesizes that implementing a
universal currency may seem obvious, although it would be highly impractical for the global
economy.
Currency in general denotes a monetary unit that is used as a medium of economic
exchange. Commonly known as money, it is usually circulated in the forms of coins and bank
notes. However, a currency is strictly specific for a particular country. To elucidate, a particular
form of currency is the symbol of the economic system of the respective country (Menkhoff et
al. 2016). The US dollars, euros, yen, dinar, pounds are all examples of currency. The value of
the currencies depend on two factors, i.e. the economy at large and the physical metal reserve of
the governments (Menkhoff et al. 2016). However, in recent times, digital currency has arisen

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owing to the advancement of internet. Still, the standard economy is based on the traditional
currency system by and large.
Given the nature of standard form of currency, it is observed to be restricted in national
economic system. However, with the rise of international trading and foreign exchange market,
there has been observed an increased tendency to opt a global or universal currency that would
be transacted internationally, without any national border, as well as withstanding the constant
conversion factor. Just as depicted in Heinlein’s sci-fi Friday, The fictional world of Balkanized
America favored Las Vegas currency for it was backed by gold standard (Heinlein 1982), the
world trading system has been using various national currencies as universal reference currency
over time . Prior to 20th century, the universal reference to currency was determined by the gold
standards, making it the contemporary global currency. Later on, the British pound sterling
gradually took its place. In today’s world, given the strength of American economy, the US
dollar has recognized as the de facto global currency. However, there are several economies who
deny the supremacy of the US, unsettling the recognition of a universal currency (Dow 2017).
According to World Bank’s data, a magnanimous amount of $75 trillion is in circulation
worldwide. However, among them only $5 trillion is in physical form, leaving the rest stand only
as virtual money stored in savings accounts, bonds, long-term deposits and stocks (Welch and
Welch 2016). Indicating this phenomenon, the advocates of universal currency argue that it is
inane to maintain various forms of currency, while the largest amount of asset is already
digitized. Moreover, economist John Meynard Keynes argued in favour of universal currency
long before digital money existed (Mundell 2012).