Track 9

Unit 10

Economics

The evolution of money

Page 95

Try it out!

Okay, let’s move on. At present, fewer than 200 currencies are in use in the world. But will that be true 30 or 40 years from now? Probably not. In the near future, a few regional currency blocks will probably develop. Europe has already done this with the euro.

In the near future, we may see a North American block, an Asian block and a South American block develop. In 30 years, we may have fewer than 10 currencies in the world. And then, given a bit more time, those currencies may merge into a single world currency. Why would this happen?

First of all, a single currency would eliminate destructive currency fluctuations or when the currency of a single country loses value suddenly. Secondly, trade between countries would be far easier and less expensive. Thirdly, there would be no need for countries to keep reserves of other countries money because they would all be using the same currency. Countries could use the money that had been kept in reserve in far more productive ways.