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In arguing the case for the use of a single global currency, many are quick to point toward the success the European Union has had since the inception of the Euro. It is common knowledge that the Euro continues to climb in value against the U.S. dollar. This is only one of several examples where a regional currency has met with success. When discussing a global currency, it is necessary to take into consideration a wider scope of factors.

If the argument is for the sole use of a global currency, the absence of competition is an important factor to be considered. The most widely used method of determining the success or failure of a currency is to compare it to the value of other major currencies. Determining exchange rates takes into account several economically competitive areas that are compared across trade regions. With the absence of competition, how would the value of a global currency be determined?

This question brings up the next point. The use of a single global currency would push the entire foreign exchange market into extinction. Trading in foreign currencies may be a small portion of a vast economy, but the opportunities are widely profitable. Of course, it is likely that a global currency would create a much more stable international trade environment. However, volatility in international trade can result in just as much profit as it can loss.

Probably the most thwarting argument against the success of a global currency is regulation. The Euro is regulated by the European Union, and most national currencies are regulated by a federal organization, such as the Federal Reserve regulates the U.S. dollar. A possible solution would be the formulation of a regulatory agency overseen by the United Nations. However, there are justifiably a number of countries that oppose the U.N., while it is widely argued that the U.N. does little in the way of assisting developing countries and acts solely to the benefit of the major world powers. That debate aside, with war and terror raging worldwide, who would be left to the task of regulating a global currency? Regulation is an oppositional factor all in its own right.

The use of a global currency is simply impractible, if not unachievable. There are those that would even argue that a global currency already exists, rendering this argument senseless. What those people are referring to is plastic, i.e. credit cards. A global currency as discussed here is not something that would be sincerely beneficial to the economy.

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