Question

There has been a great deal of discussion about the advantages and disadvantages of moving to a global currency, similar to how the Euro is the currency for Europe.

Conduct internet research and find an article on the pros and cons of a global currency. Note: do not use leaksource.wordpress.com. It is not a reputable source.

Initial Post:

What are your thoughts on having a global currency? Summarize your research and post your thoughts for or against and why.

Answer 1

Pros and cons of a global currency-

Pros-

1.No currency exchange fees- when we exchange one currency for another,there is some Currency exchange fees involved in it.Banks charge this currency exchange fees for exchanging the currency you have with the currency you need.

Having a global currency will solve this problem like you travel anywhere in the world and can use the same currency everywhere

2.Leads to better utilisation of money- as because it is pretty obvious that when different countries trade they pay currency exchange charges which are not less if there will be global currency that exchange fees will be saved and can be utilised in a better way and for better productivity.

3.Increase volume of Trade- A Global currency will boost the trade activities between countries as varying exchange rates are a barrier or can be said as an obstacle.

Cons-

1.Economic condition of every country are not same - having a global currency means establishing a global Central bank Which will regulate the flow of money in the economy but the economix conditions of every country are different and that central bank needs to act fair while forming Policies which will be good for all which is impossible.

It will have to make an economic policy with the same interest rate no matter what the economic condition of a country is all have to follow that.

2.Financial freedom will be lost- as because a global currency means the governments have to give up their independency of making economic policies benefiting a particular country.

3.Other economic crisis- Though the global currency will solve the problem of trade but it will create many other problems like it will be impossible to make an economic policy Which will benefit every country,this will lead to devastating effects on many countries.

My opinion-

According to me and my research a global currency may solve problems of trade but it will create more problems of its own so we should never adopt a global currency as every country has different economic conditions..

Thank you!