Supranational Currency Research Articles

Цифровизация финансовых систем и трансграничная интеграция: к вопросу о создании валютного инструмента для стран БРИКС

Introduction. The development of digital technologies opens up new opportunities for increasing the efficiency, transparency and accessibility of financial services, and also promotes the deepening of economic cooperation between countries. The issue is particularly relevant for the BRICS countries, which demonstrate high rates of economic growth and are interested in developing mutually beneficial partnerships. Goal. The study of theoretical aspects of digitalization of financial systems and crossborder integration in the context of prospects for creating a currency instrument for the BRICS countries. Materials and methods. The study used the method of analyzing scientific articles, monographs and dissertations on the research topic, collecting and systematizing statistical data, comparing foreign experience in creating supranational currency instruments, the method of modeling and expert assessments. The information base of the study includes scientific articles and publications in scientific journals, dissertations, monographs on the topic of the study, Internet resources, and analytical reviews. Results and discussion. The experience of creating supranational currency instruments, their advantages and disadvantages were analyzed. The analysis showed that the BRICS countries demonstrate significant potential in developing financial cooperation, creating platforms and instruments for mutual settlements, but they face a number of structural problems and challenges. Comparison with the best foreign practices reveals significant potential to improve payment instruments, in particular, to create a blockchain foreign trade settlement system. Such efforts lay the foundation for an alternative financial paradigm, strengthening the position of BRICS in the global economic environment. Conclusion. The analysis of the current state of the financial systems of the BRICS countries, their level of digitalization and interaction in the financial sector allowed the authors to conclude that there is potential for the formation of an alternative financial system and strengthening the role of BRICS in the global economy.

ПЕРСПЕКТИВЫ ФОРМИРОВАНИЯ СИСТЕМЫ РАСЧЕТОВ СТРАН БРИКС

The transformation of the world economy, the global monetary and financial system and global geopolitical changes determine the desire of countries with similar strategic goals to create international economic unions. The subject of the study is the totality of economic relations in the system of international settlements of the BRICS countries. The informal club of BRICS countries has united developing countries with dynamically developing innovative economies. The club, which has been operating for almost 20 years, has not been able to achieve effective economic integration of the participating countries due to the lack of an institutional structure, different levels and goals of economic development, as well as a payment system and settlement currency. Initially, the issue of creating a settlement currency was repeatedly on the agenda of the BRICS summits, but only on a theoretical level. However, the aggravation of the geopolitical situation, the crisis of the dollar-centric model, the discrediting of international financial institutions and reserve currencies contributed to the dynamic growth of the club’s member countries and accelerated the processes of creating a supranational currency of the BRICS countries. There are a number of problems in the formation of the BRICS currency and payment infrastructure. However, despite the difficulties, it was decided to create a payment infrastructure and a BRICS currency by 2025. The Russian Federation chairs the BRICS and has set the goal of creating a single payment space. Scientists and practitioners are currently considering options for the formation of a currency and payment system, determining the most effective and optimal option based on the use of digital technologies.

The Expediency of Creating a Supranational Currency Within the SCO and BRICS Under the Impact of Trade and Sanctions Restrictions

The Expediency of Creating a Supranational Currency Within the SCO and BRICS Under the Impact of Trade and Sanctions Restrictions

Cryptocurrency as a Possible Alternative to the De-dollarization of the Global Monetary System

The article analyzes the ongoing changes associated with the financial instability of the current global monetary system. In the course of the study, the prerequisites aimed at changing the world monetary order were considered; an assessment was made of the possible use of cryptocurrency as a new global monetary standard. The concept of supranational currency is formulated. The paper proposes an alternative theoretical solution for the circulation of the world monetary system, based on the simultaneous circulation of several types of world currencies at once, including cryptocurrencies. The purpose of this study was to study and determine the trends of ongoing changes associated with the transformation of the world monetary system, the circulation of cryptocurrency and a decrease in the level of confidence on the part of the world community in the US dollar. As a hypothesis of the study, the judgment is formulated that the improvement of the world monetary system must be carried out through the introduction and development of cryptocurrency as a new independent financial instrument that meets the requirements of modern society, as well as the processes of functioning of international monetary relations. The analysis of the actual problems of the current state and the prospects for the circulation of the current global monetary system made it possible to formulate the factors that influence the increase in the demand for cryptocurrencies among market participants. An assessment of the future of cryptocurrencies was carried out, the prospects for the influence of the existing world monetary system on international financial relations, as well as the further role of cryptocurrencies in it, were considered.

The New Possible Trinity: Supranational Currency, Capital Mobility, and Monetary Independence

The New Possible Trinity: Supranational Currency, Capital Mobility, and Monetary Independence

Classical-Keynesian Political Economy, not Neoclassical Economics, is the Economic Theory of the Future

ABSTRACT This article implies that the time is ripe for a new paradigm in economic theory comprising classical (Ricardian) and Keynesian elements of analysis. The central Section Five presents the basic equations of classical-Keynesian political economy, the price and the quantity equation, based on three constitutive principles: the classical labour value and surplus principles and the Keynesian principle of effective demand. Subsequently, two employment mechanisms implied in the super-multiplier relation, the classical-Keynesian quantity equation, are mentioned, the internal and the external employment mechanism. Section Seven provides an analysis of the actual situation on the basis of the external employment mechanism, associated with cumulative processes of increasing disequilibria and inequalities. Given this, it ought to be replaced by the internal employment mechanism, allowing for Keynesian employment and distribution policies (Section Eight). However, the internal mechanism can only be implemented if a new world economic order is brought about, based upon a supranational currency, that is, Keynes's bancor, to ensure balance of current account equilibria worldwide. Section Ten sets forth Keynes's social liberalism, the social philosophy underlying classical-Keynesian political economy, the fundamental social ethical value of which is the Common Good. Social Liberalism thus emerges as the alternative to Capitalism and Socialism.

Bancor Comes of Age: A Case for an Indian Bitcoin Reserve

John Maynard Keynes proposed the concept of ‘Bancor’ in 1940 as a supranational currency that would serve as the international reserve currency. The concept did not take off at the time, despite the underlying need to liberate the international system from the hegemonic tendencies of a national currency serving as a global medium of exchange. The emergence of Bitcoin makes it possible to revive the idea of a de-nationalised global medium of exchange. This article examines the feasibility of such an idea by examining a viable state policy for adoption and use in the international realm.

2020 Post-Crisis Development and 2021 Trends in Russia and Europe: Fintech and Digital Assets Regulation

The article examines 2020 post-crisis results and 2021 trends in FinTech regulation development. FinTech companies are entering the financial market in collaboration — or competition — with classic players. These new alliances are transforming the market. Speed and cost savings have been decisive, and DeFi applications, new digital banks and the digitization of assets are rapidly evolving. Innovation needs regulatory updates to be legitimate. The most revolutionary developments have appeared in smaller European countries, which the leaders are forced to follow. Law harmonization has become a natural step forward for Europe to regulate blockchain businesses and to agree on terminology and risk prevention measures for innovation support. Talks on MiCA regulations have begun. On account of anti-laundering and terrorism prevention rules for businesses, confidentiality has virtually ceased to exist in the blockchain space, which had previously been anonymous. The commercial turnover of big data and the use of artificial intelligence in financial services have led to problems in customer protection and privacy. Technology standards are also a key area of regulation. New types of stablecoins are playing important role in technology-based markets (from Tether to the Binance USD). Libra as a potential supranational currency is awaiting regulation in Switzerland yet meeting with resistance internationally. Finally, central banks in Sweden, China, Russia and other countries are introducing digital currencies. Changes have been accelerating on account of the crisis and pandemic, as potential solutions are appearing in the regulated classic financial market. Authors address the pros and cons of technology regulation and make a comparative analysis of the leading trends.

Russia's Strategic Priorities in the Global Monetary System from the Point of View of Ensuring Foreign Economic Security

The presented study analyzes the reasons for the need to move away from the US dollar (hereinafter referred to as the dollar) as a universal means of payment in international trade based on the existing threats, examines alternative means of international payments, and identifies their benefits and drawbacks in the context of Russia’s economic security.Aim. The study aims to identify and characterize the means of international payments that fall in line with Russia’s strategic priorities from the perspective of economic security.Tasks. The author considers the risks of using the dollar in international payments and reserves, assesses various means of international payments from the perspective of Russia’s strategic interests, and evaluates the possibility of substituting the dollar with alternative means of international payments.Methods. This study analyzes information from the International Economic Forums, statistics of the Central Bank of Russia, Federal State Statistics Service, Decree of the President of the Russian Federation on the economic security strategy of the Russian Federation until 2030, reports of news agencies, and works of Russian and foreign authors on the subject.Results. Based on the results of the conducted study, the author draws several conclusions. Due to many factors, the most important of them being the volume of trade in dollars, the dollar will remain the world’s leading currency in international trade. However, given that de-dollarization is a global process, the existing trends will amplify. A supranational currency is unlikely to appear for a number of reasons. First, the obvious opposition of the United States due to its unwillingness to let go of such a powerful lever of economic well-being and political influence as the use of the dollar as a global means of payment. The US would probably agree to creating a supranational currency in the medium term if the global process of de-dollarization reaches critical values. Second, the financial and trade centers of the euro and renminbi area are likely to focus on developing their own currencies, especially given the growing global GDP and China’s trade. Creating a supranational currency based on the existing structure of the International monetary Fund (hereinafter — the IMF), following the example of Special Drawing Rights (SDR), with the IMF virtually controlled by the United States, will not eliminate the threat of the currency being used as an instrument of political pressure on individual countries. Replacing the dollar with such kind of supranational currency does not serve the interests of Russia’s economic security. A potential alternative involves creating a supranational currency based on a structure that is independent of the IMF. In this case, the obstacles would include the obvious opposition of the US and its allies and the potential influence of the US on the emission of the supranational currency using its foreign political resources to affect the decisions made by other countries. Using national currencies in international trade in the medium term under the influence of globalization would lead to a formation of multiple currency centers. These centers would most likely be the dollar, euro, renminbi, and ruble.Conclusions. The creation of a ruble-based International Monetary Center with the CIS, BRIC countries (except China), and Turkey serves Russia’s strategic interests. Further consolidation around the ruble would require implementing a financial sustainability policy, maintaining the stability of the macroeconomic environment, creating an international bank similar to the IMF with payments made in rubles, strengthening offshore ruble areas, and increasing high-tech exports.

Supranational Currency Regulation: Theoretical and Practical Approaches

Subject. The article deals with the issues of supranational currency regulation, deeming it a prerequisite for the return of the world economy to a sustainable, confident and balanced growth path. Objectives. The article aims to study theoretical and practical approaches to the organization of supranational monetary cooperation of sovereign States at the global and regional levels. Methods. For the study, I used scientific methods of systems approach, analogy, modeling, and abstraction. Results. The article shows that in current conditions of development of the world economy the euro, being the only fully functioning project of supranational monetary integration, has not yet created conditions for the participating countries for harmonious and stable development. The practice of transferable ruble circulation proved the possibility of simultaneous expansion of mutual trade and balanced development of all participants of supranational currency cooperation. Conclusions and Relevance. To enter a new level of supranational currency cooperation, sovereign States are required to develop an integrated approach to solving a number of economic, technical and political problems. The results of the research can be useful in the development of theoretical and practical approaches to supranational currency regulation.

Complementary currency as an instrument for economic development in the western Balkans

Regional economic integration is regarded as a priority task for western Balkans countries in order to prepare them for integration into the European Union. Given the under-performance between these countries in terms of trade, we propose the creation of a complementary supranational currency that would serve the common market of the western Balkans and also intensify trade exchanges between them. We support the idea that structural reforms and the technical provisions proposed in this adopted Keynes Plan may, at least in principle, provide the necessary solutions to avoid imbalances between the countries; serve as an incentive to intensify trade exchanges; and curb inflationary and deflationary pressures in the joint western Balkans market. Our research makes a solid contribution to the debate on international monetary systems. We believe that a complementary currency would make regional integration more effective within the western Balkans but, furthermore, would also call into question the international monetary system were it to be as effective in practice as we think it would be.

Libra and Facebook’s Money Illusion

The launch of Libra, a corporate-controlled supranational currency is a bold attempt by a bigtech behemoth to leverage its monopoly over digital data and platform networks in order to draw low-income and unbanked households into its web of interconnected financial services. But in the process, argues the author, it will likely exacerbate financial fragility, global imbalances, and the already substantial financial subordination of developing countries.

Triffin Dilemma and International Monetary System : Evidence from Pooled Mean Group Estimation

This study is motivated based on concern from some renowned scholars and central bankers whom have raised the issue of the sustainability of the International Monetary System (IMS). Using the panel data set of four major international currencies, USD, JPY, EUR and GBP from 1973 to 2013 with Pooled Mean Group (PMG) estimator, to re-examine whether Triffin dilemma still exists through investigating the relationship between the reserve share, current account balance and real effective exchange rate. The evidence from the result indicates that Triffin dilemma exists only in the long run, and shows that in the long-run, current account balance is proportionate to the increased real effective exchange rate while varies inversely with the reserve shares. However, the estimation for the short-run is not significant to prove the existence of Triffin dilemma. In addition, we investigated the non-dollar panel sample and found that the international monetary system still suffers from Triffin dilemma even without the dollar. To overcome Triffin dilemma, immediate step such as having currency swap mechanism is recommended. In medium term, a multi-polar Monetary System is suggested, and in the longer time, a supranational currency will be used to replace all the currencies in the world.

The Euro Must Be Abandoned to Achieve European Monetary Integration

This article explains why the euro has to be abandoned in order to integrate the euro-area member countries monetarily. It first recalls the negative consequences of the adoption of a single European currency by a number of countries whose economies are still too different on structural grounds to support the financial constraints elicited by the fiscal and monetary policy straightjacket. It thus points out the lack of fiscal transfers between these countries and the dogmatic attitude of the ECB regarding its own policy strategy and objectives, both of which affect the (un)employment level as well as the degree of financial (in)stability across the euro area. The article then suggests a way out of this area for those countries whose population cannot support the burden imposed by austerity policies with no foreseeable positive effect for the large majority of the people. It thus proposes the reintroduction of national currencies in these countries, for which the euro will still be available but as a mere supranational currency used by their national central banks only, in order for them to settle international trade and financial-market transactions carried out by residents in their countries. This monetary–structural reform will increase financial stability and employment levels across Europe, thereby also inducing positive effects for public finance.

Regional Currency Unions and Supranational Currency

Creation of voluntary regional economic alliances of independent countries was an important area of development of the regional and world economy at the end of XX-th century. They arise as a reaction on the dominance of the world’s few national currencies, playing a world level role. A basic feature characterizes trade relations in the framework of such alliances — a departure from the world’s currencies and the use of specially created regional ones. Practically the main obstacle to the emergence and spread of such unions is instability of regional currencies associated with their binding to one of the national currencies of the country — a member of the Union or to the gold standard. The article describes the theoretical solution and practical mechanism for creating independent of any national currency or gold, a supranational currency. The purchasing power of such a currency is determined by a specially created benchmark of purchasing power. It is demonstrated that the currency of this type allows using regional currencies without discrimination of member countries of the regional union. Also, there are given arguments about the prospect of using such currencies as the world’s.

Is it time for a world currency unit?

AbstractA supranational currency, the World Currency Unit (Wocu), has recently been introduced. It creates potential opportunities for currency and risk management for businesses involved with international transactions. The authors look at the issues of a world currency, including how corporate treasurers can use it. © 2010 Wiley Periodicals, Inc.

The euro: the politics of the new global currency

First published in March 2009 to widespread acclaim, this is the first comprehensive political and economic account of the birth and development of the Euro. Today the Euro is the supranational currency for fifteen European countries and the world's second largest reserve currency. David Marsh tells the story of the rivalries, intrigues, and deal-making that brought about a currency for Europe, and he analyzes the achievements and shortcomings of its first decade of existence. While the Euro represents a remarkable triumph of political will, great pressures are building on the single currency. Drawing on more than 100 interviews with leading figures associated with the Euro, and scores of secret documents from international archives, Marsh underscores the Euro's importance for the global economy, in particular for the U.S. and British economic and political agendas. Hidden facts and fresh insights from The Euro include: how the legacy of France and Germany's tortuous relations affects it; why the UK is unlikely to accept the Euro before 2025; the impact on the Euro of the US credit crisis; how the Euro has rebounded against the aspirations of its founders; how Italy and Spain have massively lost competitiveness; and, why radical changes must be adopted to prevent a European upheaval.

TRUST IN THE EURO: EXPLORING THE GOVERNANCE OF A SUPRA-NATIONAL CURRENCY

ABSTRACT This article starts from a pervasive puzzle that characterises the use of all money: Why would anyone actually exchange real goods and services for a piece of paper, a token coin or an electronic blip? The author of this article argues that market participants accept money in an exchange based on the trust that others will do exactly the same. While it is the basis of any existing monetary order, trust becomes particularly relevant in the case of a newly created currency such as the euro. In addition to being new, the euro is also a supra-national currency and, therefore, lacks some of the political and cultural factors that help facilitate trust in single nation-states. How can one conceptualise the formation of trust in the euro under these circumstances? This article examines the evolution of trust along two dimensions: horizontal and vertical trust. Horizontal trust gets established through mimesis and identity. Vertical trust relies on institutional mechanisms – in particular the interaction between a specifically assigned agent of monetary trust (the European Central Bank) and guardians of trust (other political actors as well as societal players).

Money, citizenship, territoriality and the proposals for North American Monetary Union

Discussions regarding a possible North American Monetary Union (NAMU) between Canada and the United States exploded in 1999. Advocates of a NAMU emphasized the economic benefits to be had by creating a supra-national currency across the world's largest trading partners, including the elimination of transaction and hedging costs; the creation of a less volatile trading area; and an anticipated increase in the intensity of continental trade. But what impact would a NAMU have on the relationship between the state and civil society, particularly vis-à-vis social citizenship? This paper examines the potential impact of the proposed NAMU with respect to three aspects of state–society relationships: (1) national community and belonging; (2) political sovereignty and accountability; and (3) social rights and the welfare state. In so doing, I set out a framework for thinking about how the national organization of money in Western nation-states, a territorialization that was coterminous with the formation of a national economy, is interconnected with the rise of social citizenship in the early 20th century. Understanding the constitutive relationship between currencies and citizenship suggests ways that social, cultural and political concerns need to be taken into consideration in the restructuring of monetary organization.