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I doubt it will be a single currency. Something I think a lot of people miss in this discussion is that with computers and electronic markets dealing with curr
by api 1y ago
I doubt it will be a single currency.
Something I think a lot of people miss in this discussion is that with computers and electronic markets dealing with currency conversions is fairly easy. In the past doing everything in USD vastly simplified everything, but today I think countries just trading with whatever currency works for a given market or transaction probably makes the most sense.
There is no other world currency that looks both large and stable enough to replace USD. Chinese Yuan/Renminbi is probably the closest but it's probably viewed by many as too easily manipulated. It's a pure fiat currency run by a single party state with little separation of powers.
- gtirloni 1y agoA global currency has to have liquidity and availability and the Renminbi has none of those things. China doesn't seem willing to turn their country into a major importer (thus making the RMB more global) so I doubt it will replace the USD either. Probably all three USD/EUR/RMB will be around without a major takeover by a new entrant.
- MaxPock 1y agoChina is a major importer.Isnt 3 trillion dollars a year in imports "major" to you ?
- selectodude 1y agoChina pays for their imports using dollars.
- gtirloni 1y agoIt's a much much big exporter.
- pphysch 1y agoMy view is that the primary purpose of money is to enable balanced exchange of useful goods and services, and with that premise, "money" could be replaced by large information systems. In fact, that transition is long underway. Who uses cash anymore?
- triceratops 1y agoComputers and electronic markets don't solve currency conversion so easily because it's not just about doing math. If say a Thai company wants to buy cocoa beans from Nigeria, the Nigerian exporter doesn't have any immediate use for Thai baht if they aren't planning to buy something from Thailand. If exports and imports between two countries aren't relatively balanced there won't be a liquid market between their currencies.
- api 1y agoWhat if countries form networks? If Nigeria has no use for Thai Baht they swap it with another country for US dollars, Euros, Rinminbi, whatever. It could all be done automatically in near real time.
- triceratops 1y agoSo there's still an intermediate currency needed. Which is how it works right now. And the preferred intermediate currency when trading currencies with non-liquid markets is USD.[1] 1. https://www.lynalden.com/may-2025-newsletter/ https://www.lynalden.com/may-2025-newsletter/
- api 1y agoIt might be how it’s done now but I don’t see why that’s how it has to be done. It’s just math and database transactions. Not having a fixed intermediate does make things more complicated since it requires many-party transactions between floating currencies. But lots of math nerds with backgrounds in physics go into finance. I’m sure they can figure it out. You could also create derivative instruments based on baskets of currencies and use those as intermediates.