What is better? A national currency or global currency ? And what are the pros and cons of both options? In the 21st century, these are questions that more and more people are asking. That is not surprising, because more and more people are discovering the disadvantages of the national currency. Even if the question is whether a global currency is the solution. For example, could crypto be the solution?

With a national currency we mean the currency used in 1 area. Like the US dollar. This is only used in the United States. A global currency is a currency that is used worldwide. Bitcoin is a good example of this.

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• Why are more and more people experiencing the disadvantages of a national currency?
  • Businesses
  • Consumers
• Is a global currency the ideal solution?
  • A solution for developing countries
• What would a global currency look like?
  • Safer than physical money
• Which crypto could serve as a global currency?
• Conclusion

Why are more and more people experiencing the disadvantages of a national currency?

In this day and age it seems that more and more people are experiencing the disadvantages of a national currency. And that’s right. Because in fact, there are more and more people and companies that actually suffer from the disadvantages. For them, a global currency would be the ultimate solution.

Businesses

Due to globalization, it has never been easier to trade with companies abroad. And it has never been easier for these companies to sell their products and services to consumers abroad. They, in particular, prefer a global currency.

When they do business in a country that uses a different currency, they have to change money continuously before they can do business at all. Suppose a Dutch company opens a factory in China. This Dutch company is constantly exchanging euros with Chinese renminbi. Only in this way can the Dutch company make an investment in China. Wages will also have to be paid with the Chinese renminbi.

The company then has the goods shipped to Europe, after which the value is converted into euros. After all, the products must be sold in Europe. Now the company is lucky that we (almost) all use the euro within Europe. Suppose every country in Europe still had its own currency. This company would then have to draw up special prices for each country.

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It takes a lot of time and money to have to constantly exchange money between different currencies. This is a major cost item for many companies. That is why these companies prefer to see a global currency. This global currency would solve many problems for them.

Consumers

Consumers may also experience disadvantages of the national currency. It is often already a barrier for consumers to buy something from abroad. The Dutch like to buy products from their own country. That is why you see that Amazon is doing much worse in the Netherlands than abroad (we continue to order from Bol). It is completely a barrier when we have to pay in another currency. Would you order a product from China if you had to pay in Chinese renminbi?

Is a global currency the ideal solution?

The companies and consumers mentioned above see the solution in a global currency. A global currency is a currency that is accepted and used by all countries in the world. You will never have to exchange money again before you can make a purchase abroad.

It saves a lot of costs for companies. They no longer have to wait for the money to be exchanged. They also no longer pay transaction costs, and it saves a lot of effort and money in the accounting.

It is also a lot easier for companies to sell products to consumers abroad when they use the same currency everywhere. And consumers can also buy products and services from abroad much more easily. The threshold to do this is suddenly a lot lower. This could all be very positive for the global economy.

A solution for developing countries

Another advantage is that the new currency is a lot stronger and more stable. Normally, the currency fluctuates based on the events in a country. Suppose the government of Indonesia breaks up due to a scandal. There is a good chance that the value of the national currency (the Rupiah) will fall sharply as a result.

This is because consumer confidence is declining considerably. Foreign companies are also suddenly more reluctant to invest in Indonesia. This naturally has many consequences for consumers and businesses in Indonesia. This problem probably would not have arisen if there was a global currency.

The value of a global currency is not determined by what happens at the national level. This is because the value of the currency is determined by all participating countries. Only when something big happens on a global level will it be reflected in the value of the global currency.

This is very positive for developing countries, for example. The value of their national currency is often still very unstable. And that is with all its consequences. That is why it would be nice for these countries if there was a global currency.

What would a global currency look like?

Suppose all countries decide to switch to a global currency. How could that turn out? There is a chance that people will decide to use a digital currency. Crypto could play a big part in this. Crypto brings many additional benefits.

Crypto is completely digital and decentralized. And especially the latter would be very positive. It means that no country has any more authority or interest in the global currency. There is no actual owner of the money system.

When a new physical currency is chosen, central banks must be appointed and located in certain countries. There will also be factories in a number of countries that produce the money. This can give certain countries an unfair advantage over other countries. And that’s something you don’t want when you’re using a global currency.

There are no central banks in crypto, and no money needs to be printed. The global currency runs on the blockchain. And anyone in the world who has a computer can participate in this blockchain.

Safer than physical money

Crypto would also be a lot safer. Everyone can see where money goes, because it is a very transparent system. Many people say that crypto is used by criminals precisely because they cannot be traced here, but that just depends on which crypto coin and blockchain it is.

It is quite possible to develop a crypto where you have to register with your personal data. Then everyone can see where money is going. It is therefore a lot more difficult for criminals to carry out criminal activities. In that case, crypto is a lot safer than the currency in a monetary system.

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Which crypto could serve as a global currency?

That is very difficult to say. Actually, a new crypto should be developed that could be used as a global currency. After all, there are a lot of requirements that are placed on a global currency. And many cryptos only meet some of those requirements.

That is why it might be better, as said before, to develop a new crypto that meets all the requirements. This also increases the chance that all countries will participate in the new global currency.

Conclusion

So there are many disadvantages to the national currency. It is expensive and time-consuming for both businesses and consumers to continuously exchange currencies. And that is not exactly good for the global economy. Currencies in developing countries also fluctuate greatly based on national developments.

A solution to this problem could be the global currency. With a global currency, both businesses and consumers can pay anywhere in the world without having to exchange. Crypto could play a big part in this. It is safe, digital and decentralized. As a result, there are no stakeholders. Power is therefore much more fairly distributed when a money system is used that is decentralized.

However, it is difficult to say which crypto one could use as a global currency. Of course there are many requirements for such a coin. It would therefore perhaps be best to develop a new blockchain and crypto that will serve as a global currency. In this way, all requirements can be processed and it remains a sustainable solution.

Still, we will probably have to wait a long time before this actually happens. It takes a lot of time, effort and money to get all countries to switch to a global currency. Especially if this global currency is a crypto currency. There are enough countries that are not happy with crypto at all, and have even banned it. Therefore, time will tell how this is going to end.