The Path To A New World Currency
Countries may have just discovered the newest way to trade.
From recent research and discussion, I have fallen into a ‘rabbit hole’ when it comes to the world’s economy and banking structure. It is not the easiest path to talk about or look into as the concepts can become advanced fast as well as many people have a large variety of opinions that usually contradict one another. However, I have come to think that in the next decade or so, A type of Cryptocurrency could potentially take over as the new world currency. Now this being said I don’t believe that Bitcoin, Ethereum or Cardano will be the next global currency, I just think many countries might agree that a decentralized currency could be in their own interest.
Now to begin there is no actual world currency as it stands today, however, there is a reserve currency that many central banks, corporations and governments use daily. The most widely used reserve currency is the U.S. Dollar. The reason for this is because of The Bretton Woods Conference in 1944 which was officially known as the United Nations Monetary and Financial Conference which had delegates from 44 nations meet in Bretton Wood, New Hampshire. This conference was primarily set up to discuss what new rules the Post-WWII international economy would need to operate effectively. The conference successfully accomplished three big tasks; created the International Monetary Fund (IMF), established the International Bank for Reconstruction and Development (IBRD) and officially allowed currencies to be backed by other nation’s currencies rather than the gold standard. That last legislation allowed other nations to use the US Dollar instead of gold in their reserves which many nations did partake in soon after.
When former President Nixon switched off the Bretton Wood System by disconnecting the US Dollar from gold, a problem arose. Nations thought best to keep some gold reserves in the international banks as a way to pay off multinational deals, but that did not solve how many nations that held the US Dollar previously in their reserves rather than gold would fare in the international economy. With this nations just continued to use currencies as their reserves and soon the US Dollar became the de-facto global currency.
Now all this global power that the US Dollar has over other currencies does not sit well with certain nations. As if they are wanting to become the most powerful nation in the world they need to not be fueling the United States’ power in the process. China and Russia have already started on setting up an independent trade network to reduce their reliance on the US-led international financial system. Chinese President Xi Jinping and Russian President Vladimir Putin are advocates on moving on from the use of United States Dollar. Now it might be said that Russia and China are looking to find a way to each have a control over the world’s oriented currency, but the United States might not hold its power for long. If all nations are willing to give up their control over the currency a use of a blockchain oriented currency would allow for better transparency, easier transference, and no government tampering which would be a great solution.
Now onto the bad news…
Well the solution seems quite simple there are a lot of problems that need ‘ironing’ out. First, is how the switch to a new currency as the world currency could potentially break global markets and the value of many nations currencies as the price of the world currency would sky-rocket and leave some nations having to shell out more capital than they otherwise would currently. Another issue is there is currently supply caps to many blockchain currencies and with that brings up and issue if Cryptocurrency was utilized it would need to be able to create an everlasting amount over a period of time due to the idea that the Crypto could be lost in time or be saved by an individual who is not willing to keep the currency circulating which if a supply cap was in effect could lead to problems in the future. Lastly, getting all nations to agree on a global currency and not having control over the system would not pass in the modern day.
In the next decade or two if we are able to establish a blockchain currency that can withstand the test of time and be as stable as Bitcoin has been in the new era of Cryptocurrency we could see an advanced economic future.