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Abstract: This
research initiative on “World Currency,” based on my original concept, began in
the year of 1995 and was formally proposed as a research project during the
year in 2003–2004 as part of the MSc Economics Portfolio at HKUST. This paper
proposes a paradigm shift in the international monetary system through the
establishment of a supranational “World Currency.” It argues that excessive
dependence on the United States dollar has led to global monetary imbalances,
distorted international capital flows, intensified trade asymmetries, and
increased systemic financial risks associated with the Triffin dilemma. Drawing
on institutional economics and established theories of money, exchange rates,
and international monetary adjustment, this paper examines the limitations of
existing arrangements, including fixed and floating exchange-rate regimes,
foreign-exchange reserve systems, and regional currency blocs. It develops a
conceptual model in which the World Currency emerges through the progressive
integration of major monetary domains, represented initially by the US dollar,
the euro, and an Asian currency domain. This paper further advances a
contractual interpretation of money, defining currency not only as a medium of
exchange but also as a socially recognized substitute for contractual
obligations and “time.” This perspective seeks to connect macroeconomic
monetary governance with microeconomic individual choice and institutional
behavior. The proposed system would transfer currency issuance and monetary
coordination to a recognized global institution, while enabling national
central banks to operate within a shared framework of interest and monetary
standards. Although the paper is primarily theoretical, it aims to bridge the
gap between macroeconomics and microeconomics, in the general accepted medium
of exchange “World Currency” in the contractual arrangement, particularly in
exchanging labor “time.” We argue that global monetary integration could reduce
exchange-rate uncertainty, lower transaction costs, improve the balance of
international trade, and provide a more stable foundation for global economic
cooperation with collective outcomes. DOI: https://doi.org/10.51505/IJEBMR.2026.10912 |
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