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Pros and Cons of a Universal Currency

The concept of a single worldwide currency has been suggested since the 16th century, and came close to being instituted after World War II -- yet the idea remains little more than that. Proponents argue that a universal currency would mean an end to currency crises like Zimbabwe's. A single currency wouldn't be subject to exchange rate fluctuations because there would be no competing currencies to exchange against. In other words, a universal currency would lose its value as a commodity bought and sold on open markets and would have value only for its worth in buying other commodities. To put it plainly, money would become just money. Its purchasing power would be the result of the adjustment of interest rates and other monetary policy tools in response to inflation or deflation.

Who would be responsible for adjusting those interest rates, though?

One of the chief fears among opponents of a universal currency is the creation of a central body formed to oversee the monetary policy for a single world currency. An extant international body, the United Nations (U.N.), provides an example of the potential pitfalls and strength a central global monetary body could expect. Successes like peace-building missions in nations as disparate as El Salvador, Mozambique and the former Yugoslavia attest to the power a unified international body can have to resolve conflict. On the other side of the coin, the U.N.'s Intergovernmental Panel on Climate Change (IPCC) is widely accused of replacing science with diplomacy, as nations responsible for contributing to climate change aren't openly taken to task in IPCC reports.

These reasons and others continue to prevent the adoption of a universal currency. Perhaps closer on the horizon is the integration of separate currencies within regions into unified currencies. This has already occurred in some areas. The most famous example is the euro. As of 2013, 17 countries in Europe use the euro instead of their local currencies. Some the benefits touted include stimulation in trade activities and a reduction in transaction costs and fluctuation risks as member countries no longer need to exchange currencies when doing business with each other. Tourists also don't have to switch currencies when they travel either [sources: Currency Solutions, European Commission]. At the same time, there are significant disadvantages. For instance, a debt-laden country is no longer able to devalue its own currency to make its goods more attractive to buyers from other countries. The financial troubles of countries like Greece and Spain in the 2010s have been exacerbated, some experts say, by the fact that they use the euro [sources: Schoen, Currency Solutions].

The euro is not the only example of a shared currency. Eight West African nations share a common currency, the West African CFA franc (CFA stands for Communauté Financière d'Afrique or African Financial Community), which was introduced in 1945. A further six Central African countries use the Central African CFA franc, though the two currencies are interchangeable [source: Miller and Bouhan]. In 2008, Central American nations agreed to create a single currency for the region, but as of 2013 it has not happened [source: Central America Data]. Meanwhile, the Union of South American Countries put the brakes on their own common currency project in 2011, citing the experiences it observed with the European Union and the euro [source: MercoPress].

So while the debate over regional and universal currencies continues, people like Mike Hewitt will have to count money the old-fashioned way.