Moving To A Single Currency... Or Lots Of Local Currencies?

from the or-a-combination-of-both? dept

A few days ago, Kyle Brady sent over his blog post wondering if the world would eventually move to a single currency. His suggestion would be that it would be based on the Euro, though can you just imagine the political uproar in the US if anyone actually took a step in that direction? Politically, it's a total non-starter. If you think that people are freaking out over health care reform, just wait until anyone in power suggested something like this. It simply won't happen. Brady's post goes on to suggest that this could help us move to a more digital currency, though I think we're already pretty much there. Actual paper money is a tiny fraction of the real money supply these days. Money is digital for all intents and purposes right now.

However, just after reading that... I came across an article suggesting pretty much the exact opposite: that we're perhaps more likely to move to more splintered currencies as local regions start creating their own currencies. The article, in particular, talks about Brooklyn trying to create a Brooklyn-specific currency. Such things are hardly new. Having spent five years of my life in Ithaca, NY, I was quite familiar with Ithaca Hours, the local currency that is often held up as the model on which such local currencies can work. Of course, we've seen other attempts to do this in the past, and I'm not sure any can really get big enough to matter. But I can see how they are appealing to some during economic downturns, as they look for better ways to try to get people to focus on local businesses. Designing a currency that encourages you to spend locally might seem like a good idea, and it can work in small doses. In the end, though, I doubt either movement (single world currency, splintering local currencies) is likely to become that big of a deal in the near future. The system we have now actually works pretty well (despite the economic mess faced today).

Filed Under: currency, local currencies, politics