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>Though I don't really understand why governments need a single currency. Just use your own currency and exchange other currencies, it'll settle down eventually
by GTP 3y ago
>Though I don't really understand why governments need a single currency. Just use your own currency and exchange other currencies, it'll settle down eventually.
Because commerce is much easier if everyone uses the same currency, plus the more countries use a currency the more stable the currency gets. This where two big reasons why in EU most countries decided to use Euro.
- atlantic 3y agoIt's not that commerce is easier: currency exchange is pretty frictionless nowadays. It's that the value of inputs and outputs, which are critical to running a company doing part of its business abroad, or buing inputs from abroad, is much easier to calculate without having to account for exchange rate fluctuations.
- ethbr0 3y agoI'd put it is that conducting international trade in a single currency is more systemically stable. Iow, the currency's ubiquity and total amount buffer shocks to the system, in a way that multi-polar currency use could not tolerate. If some folks decide to break {insert smaller international currency here} because they think it's overvalued and they don't use it, they probably have the means. But it's difficult to tip over a world-economy sized apple cart. And a single trade currency also mostly keeps nation-states out of the currency warfare game, because it's a gun pointed back at their head too.
- GTP 3y agoThis is what I meant by saying that it makes commerce easier.