By 2050, at least two pan-regional currencies, modelled on the Euro, will be used in the world.

Could do with the word "other" inserted after "two"

Inserting the word "other" is problematic because it suggests that there will be at least three pan-national currencies, one of which will be the Euro. The Euro may no longer be around, or have been absorbed into some larger currency, or have split to the Kranc, Markkund and Lirachma.

The US Dollar is currently the offical currency of the United States, Ecuador, Palau, and the British Virgin Islands, which makes it pan-national, but it is not a bonafide example of the Euro model.

That answers that.

It's a clarification worth adding to your argument.

It is true that, already, there is a “dollarization” effect (when I employ this term, I refer to adoption of US dollars or any other currencies such as French Franc in Andorra). Let’s forget about unofficial dollarization - whereby individuals decide to extensively use a foreign currency and/or the adopted currency is used alongside the official one by government bodies and businesses.
For the clarity of my demonstration, I will focus on explaining how “official dollarization” differs from the Euro system.

In my statement, what I mean by “modelled on the Euro” is:
a) It is a proactive decision rather than a defensive act. The aim is not to solve a currency exchange problem by abandoning sovereignty over a currency. It is about reinforcing the economy of several countries – I state at least three – which have convergent interests.
b) It is not about adopting, in a unilateral or bilateral way, a currency; it is a multilateral movement. It comes down to either creating from scratch a new currency (i.e. the Euro) or expanding an existing currency (in case for example Mexico and Canada would decide, with the approval of the US government, to adopt the US dollar as their exclusive legal tender).

I think that the Euro will still exist in 2050. When I stated “at least two pan-regional currencies”, I implied the Euro plus another one (that obviously must comply with the two definitions mentioned above).

In case Paul Blay is ready to counter-bet only if it is stated that there will be two pan-regional currencies, on top of the Euro… then I have to think about it!

I hope these explanations were clear and helpful.

In the wording of your bet the use of `modelled on the Euro` surely DOES imply two currencies on top of the Euro?

Even if you mean only one more currency, I think I would take you on if I had the money but alas I'm still paying off university debts...

I think your date is a very interesting one, especially when you look back at Europe 50 years ago, and compare the sense of unity (economic as well as more general) to how it has been during the past few hundred years.

I think that the Euro countries are unique, in the sense of shared community. Despite the fact that this sense of community has existed for such a long period of time, it still took two world wars before the European Union was set up, and its taken so long after then for even just a few of the EU nations to embrace the Euro that I think the date you give is tantalising, but unrealistic.
For sure, if the Euro is shown to be a success then it increases your chances of winning a bet, but I think Europe is pretty unique here. There are many countries rich enough to help out any who's economies have trouble coping with the Euro and its implications for things such as shared interest rates etc.

Regardless of countries being prepared to give up aspects of their sovereignty, or overcome ethnic differences, many countries do not have the economic stability to cope with the risks of sharing a currency, and more importantly do not have the means to implement a shared currency in the first place.
And dont forget that with dollarization, it is taking up a currency that is backed by the worlds most powerful nation, that is part of the appeal of the dollar...it will remain a dollar and remain valuable as such. Does any other currency really have that kind of weight behind it?

I can't think of another region of the world where there are enough rich and stable nations to help out the poorer or more unstable ones. In terms of shared interests, East or South East Asia probably stands the best chance of going for a shared currency but I can't see it happening before 2050 because of the simple fact that even if you remove the ethnic problems, the differences between the countries in terms of economic stability are too great.

You mentioned Mexico and Canada, and I think thats very interesting, perhaps the most likely but still I don't think that would happen, partly because the Canadians seem to have a fear of gradually being absorbed into America, and are desperate to hold onto their identity.
Its possible that Mexico and Canada might go for the US dollar, but I cant see anywhere else taking this up in the next 50 years.

I think that no African nations would be unable to implement a shared country so soon, and neither would South American or Central American nations. I suppose there is a slim possibility of some sort of shared currency amongst middle eastern nations, whether its purely the arab ones or more generally the islamic ones, but again I dont think there can be enough stability or unity within the next 5 decades.

"Inserting the word "other" is problematic because it suggests that there will be at least three pan-national currencies, one of which will be the Euro."

How about "not including"? or is the Euro to be included (if still present) in _two_ pan-national currencies needed for a "yes" result? It's also difficult to see how the Euro can be based on the Euro ;-)

Obviously whether the "yes" depends on two, or three, pan-national currencies will effect it's likelyhood of success.

I see some interesting comments that I would like to address.

First of all, the problem with loss of identity when a currency disappears.
In my opinion, it is a fallacious argument. A currency, as money, is a mean that allow people, companies and governments to buy, sell, and charge. When you buy a book, whether you pay in US Dollar (if you’re an American citizen living in California) or in Yen (if you’re the same person, but in Japan for a holiday trip), it won’t alter the intrinsic quality of the book. Once again, a bank note, a cheque or a credit card are just means of payment. In this context, I don’t think that you can justify a corollary between national currency and national identity. By using Euros, Italians won’t stop eating pasta and drinking red wine, German won’t stop building great cars, French won’t stop participating to street demonstrations, and Spaniards won’t swap their tapas for fish’n’chips. It’s a caricature, but I bet you get my point.
It may take a while to reluctant people to understand that their lifestyle is not endangered by the adoption of a new currency, especially if it is a pro-active choice made by their governments.
With this in mind, to come back to the example mentioned previously, Canadians should not be afraid of loosing their cultural prerogatives if they decide to merge their currency with the US and Mexico.

Delays for implementing the Euro.
Paul rightly stated: “it took two world wars before the European Union was set up, and its taken so long after then for even just a few of the EU nations to embrace the Euro”.
Yes, but the Euro is premiere. That’s why it took a long time. Now that it is done, it will inspire other nations that should be capable, provided political willingness is patent, to set up a similar system in less time. Furthermore, the terrible conflicts that marked the European continent during the 20th century didn’t exist for instance in South America or Oceania. Nevertheless, even in regions that experienced conflicts – such as South East Asia – susceptibilities (when they exist) will be overcome by wisdom.
As you can see, I am quite optimistic… otherwise, I wouldn’t have placed this bet.

Convergence of economies.
This could be regarded as a pre-condition for success. I do agree that this may be the biggest problem. However, within a sole country, there are already economic and social disparities. For example, in the UK, because house prices rocket in London and the South East, the Bank of England may decide to increase interest rates… while in the more industrial north part of the UK, industries will face more difficulties to export their goods. Similarly, Bavaria has an unemployment rate twice lower than in the rest of Germany. How could the former Deutsche Bank be totally impartial? My point is that the problem of regional convergence is not inherent to the Euro. It already existed within each country.

Rich vs. instable states.
Yes, stable and rich countries are more likely to succeed if they decide to merge their currencies. On the other hand, developing countries may be better off if they abandon their own currencies to create a supra currency… It will not be automatically beneficial, but it could increase their chance to reach economic stability.

Africa
Some countries already use the “Franc CFA”, which is a sort of ersatz of the French Franc. The next step could be a currency modelled on the Euro.

Finally, regarding the terms of the bet, I am ready to agree that there will be, on top of the Euro in the European community, two regions (i.e. each with at least two countries) that will adopted a common currency (to be created, like the Euro, or already existing).

If, by some miracle, the entire world started using one currency then it would be impossible for your bet terms to be met. ^^

True. But if this happen before 2050, I'll be glad to have lost the bet!
More seriously, there could be a secondary bet that stipulates that, by 2150, there will be one currency per continent...?!

"there could be a secondary bet that stipulates that, by 2150, there will be one currency per continent...?!"

I wouldn't divide things by continent in such a bet. I'd say that "there will be the same, or less, currencies than there are continents." Of course then you have to count your continents. ;-)

You'd be surprised how many different answers you can get to the "How many continents are there?" question.

I'd bet two pan-regional currencies will be located in Central America and in a region around south of Africa, and by 2030.

You are right about the essence of culture and tradition remaining the same.
English people arent worried that they will lose their Englishness if they adopt the Euro. They are worried about economic factors such as the country giving up control over its interest rates. No matter that our interest rates are closely tied to those in Europe anyway, and that most of the perceived control a country has over its own economic policy is illusory.
We are not talking about rational thinkers, either, we are talking about democracies in which the lowest common denominator carries a lot of weight. People don't want the UK economy to be too closely tied to that of Europe, and I have to admit to myself that no matter how irrational it is, part of me just doesnft like the idea of giving up the pound because the pound is, well...English.
Cultural identity is not simply determined by things such as traditions or lifestyle. Canadians will still be Canadians. All the Canadians I have talked to have been very conscious of the fact that they are NOT Americans. It is very easy to annoy a Canadian by saying `Yeah but isnt Canada just the same as America anyway?`

If Canada were to consider adopting the US dollar, many people would be worried about the government losing many of its powers with regards economic policy, and that the country would gradually become a de facto American state.
It would be seen as `giving in` to America in some way, I think. Not by everyone, but by enough people to vote against it.

The wars in Europe were part of what led to the creation of the EU. People thought `we can never let this happen again` and strove for unity and the breaking down of barriers between nations. Europe was first because it already had this sense of unity that the wars helped push to unprecedented levels. I cannot speak for latin americans, south americans, or africans, so I dont know if they have the same sense of unity that europeans seem to have, where they retain their national identity but within a larger body.

With regards economic convergence, the economies of the countries have to have close ties to begin with, hence Germany having all that difficulty beforehand...they had to get their economy in line. Ireland had to change its interest rates by something like 6% if I remember correctly.
I didnt major in economics, but it seems that you need to have some control over your economy in order to do this.
But I suppose no control might work just as well. Argentina could just give up its currency instead of devaluing it.

I pretty much agree with most of your other points, but only in a longer time frame. I think that Sergio is right with regards the locations, ultimately I'm optimistic but I think it will take a while for people to get their acts together/be persuaded, even assuming that the Euro is dubbed a success in the next 5 years.
I just dont think that things will happen so soon as 2050.

I havent checked it out but I'm guessing that North and South Korea have different currencies?
If North and South Korea finally reunite, something would have to be done about the currency, especially as North Koreas economy is a complete shambles and would need overhauling.
Can `pan regional` include just 2 countries?
Just a thought...

"English people arent worried that they will lose their Englishness if they adopt the Euro"

I think the word 'sensible' needs to go at the start there. Or have you not seen The Sun recently? ;-)

I'm not particularly enthusiastic about the Euro - but the anti-Euro side has some particularly unsavoury bed-fellows. I'm not worried about the 'keep the pound because it's English' mob, but there's a graduation something like ...

Pro-pound -> Anti-Euro -> Patriotic Pro-Britain -> Anti-Europe -> Racist

and basically my first impulse would be to vote where-ever the National Front _isn't_ voting. ;-)

Korea is a good point.
It's a specific case that I don't consider valid e.g. it won't count for the results of this bet.

Maybe I could formulate the bet as follows: "at least two countries of significant importance, and with no history of recent separation"... or something like that.

The Canadian case & the loss of sovereignty
I have to say that the situation between Canada and the States is unique. Even if heavyweight nations like Japan or Brazil were joining or creating a common currency, their influence will never be as dominant as the USA’s one: we are talking about the largest economy in the world.
In the beginning of the debate, you rightly picked up this example, not because, in my mind, it is representative, but because it poses many questions.
So, I wish to forget the particularities of Canada and USA, and concentrate on the loss of sovereignty, rather than the loss of identity, which, as I argued previously, is not relevant in my opinion.
As you remarked, national economies are deeply interconnected.
If we go back to the main assertion of this bet, I do think that, as in Europe, some citizens will, in some countries, think that joining a common currency “makes sense” – whether their thought process is rational or not. And I do think that the success of the Euro will encourage more people to think like that.
In the end, if you live in Cornwall, why a London banker is necessarily more concerned about your fate that a banker from Seville (‘banker’ is employed here as a generic term)? If the Bank of England duly represent, in a democratic way, all British people, there should be one representative either:
- per region?
- per business sector?
- per social category?
In theory, it is not impossible, but I doubt it would be easy to implement. Therefore, replacing several British bankers by several European bankers doesn’t constitute a major loss of sovereignty… even if many people perceive it differently. But this is my personal opinion… and this is why I have launched this bet!

Wars in Europe and the situation elsewhere
Yes, the “we can never let this happen again” statement helped Europe to become an economic and political community. But I don’t think you need a system strictly based on the EC rules as a prerequisite to a common currency. There could be a ‘lighter’ way of cooperating.
Regarding the sense of unity that exists in Europe, you may be right. However, using small number of languages (two in South America, three in Central Africa – if you disregard dialects) represents a convergent factor.

Timeframe
Let’s assume that, in the next ten years, Argentina, Brazil, Chile, Paraguay and Uruguay start discussing the practicalities of a common currency. It may take them ten more years to agree on the principles, and twenty more years to finally launch it. It is still within the 48-year frame.
I just think that, simultaneously, another region will commence a similar journey.

I have read your blunt and interesting comments, but I have decided to disregard national/local political issues... even if the creation of a common currency is intrinsically a political debate.
I hope you get the subtleties of my point !

Agreed. Political and nationalistic bickering is not the way to triumph in this forum! Does the bet have merit? Only you can decide.

I think we may be lacking some historical perspective when we argue about some regions not having the ecconomic stability across the region. It was just a couple years ago that everyone was talking about the emerging markets in Asia. Seventy years ago England was a superpower. (No offense to any Englishmen in here, we still love you even if you aren't what you used to be.)

I think another possibility seems to be being ignored here. The Euro was formed from a bunch of states, with several near the top of the ecconomic ladder, some in the middle, and some in pretty bad shape. If you look around the world, the reason that the dollar is so popular is because a superpower and a strong ecconomy back it. Separate identity aside, there are several countries that might emerge as world powers in the near future who could convince a bunch of smaller neighbors to go along for the ride. China seems the obvious example, with North and South Korea, Mongolia, (Tibet), and other Asian neighbors. India I think is a longer shot, not because it won't emerge as a major power, but I think the time frame is too short considering the hatred between India, Pakistan and Bangladesh. I supose Sri Lanka and some of the island states in the Indian Ocean might be candidates. Saddly, I think Africa may still be recovering from AIDS.

Ok, North America, South America, Europe, Asia, Africa, Australia, Antartica. I count seven continents. I can see leaving out Antarctica in many situations- our contestants come from all six continents- and I know sometimes Europe and Asia are called Eurasia, but I swear I heard someone on TV the other day talking about the four continents. (Maybe the four corners and she mispoke?) I don't know. That's how I was taught them in school in New York State.

Periodically (usually whenever our economy is struggling :-) ), some people here in New Zealand start talking about the possibility of an "Anzac" dollar --- ie: a shared Australia / New Zealand currency.

I can't see it happening in the next ten years (partly because I think the Australians don't currently want it), but in the next forty-five? Could be ...

(and if it does happen, I guess it could suck other South Pacific nations in too, particularly as a number currently use the New Zealand dollar (including Tonga, Tokelau and Niue))

In addition, East-Timor and Papua New Guinea could also join up.

On 14 July, I attended a conference about Brazil at the London School of Economics. I heard President Luiz Inácio Lula Da Silva stating that a sole currency for the Mercosur could be implemented.
That's good news for my bet!

Paul, you said:

"I'm not particularly enthusiastic about the Euro - but the anti-Euro side has some particularly unsavoury bed-fellows. I'm not worried about the 'keep the pound because it's English' mob, but there's a graduation something like ...

Pro-pound -> Anti-Euro -> Patriotic Pro-Britain -> Anti-Europe -> Racist

and basically my first impulse would be to vote where-ever the National Front _isn't_ voting. ;-) "

While I sympathize with your lack of enthusiasm for the National Front or similar organizations here in the States, I think that there may be solid non-racist reasons for the UK to think a bit longer before adopting the euro.

The biggest reason, of course, is the lack of accountability on the part of the European Union's fiscal bureaucrats. We have the same problem here with the Federal Reserve Board (who control our "national banks") - unelected bureaucrats who have an absurd degree of control over the growth of the money supply in this country, and who answer to no one.

It seems to me that over the years, the pound sterling has shown decent stability. I wonder how stable the euro will prove to be.

It seems to me that over the years, the pound sterling has shown decent stability. I wonder how stable the euro will prove to be.

It's still an open question but the Euro has shown a tendendancy to be used as a 'dollar refuge' when the US has a bad day - probably simply due to its size.

My impression is that the UK hasn't yet gained or lost that significantly from not having joined already.

sergiorozalen said:
"I'd bet two pan-regional currencies will be located in Central America and in a region around south of Africa, and by 2030."

Throughout the former French and Belgian colonies in Africa I remember a common regional currency called the "CFA franc" loosely linked to the French franc. ("CFA" I think stood for "Communaute Franco-Africain").

Does anyone here know if the CFA franc is still being used as a regional currency?

Vance - Do you really think that currency will even still be around in 2050?
I can think of (2) events that make that idea ridiculous.
(1)Smart Card Type Technology.
(2)Greed. Hopefully we will have come to the realization that all economic models show that all the world economies can't tollerate greed and will collapse.

Sometimes as Americans we forget about the "United States of" part.

If the USA cannot balance its books and eradicate their Trade and Budget deficits,the collapse of the US Dollar is inevitable.The rest of the world WILL eventually lose patience and refuse to fund the affluent lifestyle of the USA.
To fill the void currencies linked to religion and the religious rules applied to these currencies will emerge.

Why the US dollar is the world reserve currency? The dollar is backed by the Military & not industry. How else to explain chronic trade and budget deficits. In effect the federal reserve prints money which is recycled and held in the form of US treasury securities by foreign central banks such as Japan, China and the ECB..This is the motor which drives the US domestic economy. Look at the service industries such as fast food chains, hotel/tourism, bloated welfare expendtures/bureacracy,prisons etc. Generally, hamburgers are not a viable product which crosses international bounderies.

In effect the foreign holders of US debt are dared to pull out..If they do then american consumers are stripped of employment financed through foreign credits via holders of US securities. Unemployed US citizens can't by foreign products..the whole system comes crashing down...

I fear a catastrophic meltdown of the global economy. A new Monetary unit should be launched setting a fair value which can not be manipulated by a nation or coaltion of interests.

Hasn't at least one country already "synchronised" its currency with the US dollar? If so, then hasn't this prediction already come true? I think I remember hearing that Argentina had done this or something...

If I had the money, I'd probably make a prediction on this site about this; I don't believe that there will be any more "Euro-like" super-currencies. The world has quickly been becoming more capitalist, and the next step toward that is taking away the governments' monopoly on money. I know that sounds crazy, but most revolutionary ideas do sound crazy before they happen. Afterwards its just common sense!

Ever since our governments moved off the gold standard, they have been able to print more money than there is value to back it up, causing inflation. Its this inflation that causes recessions and depressions; the bubble bursts. Of course it is in the government's interest to print too much money, so there's no end in sight. But if there are allowed to exist multiple currencies in a given country, with no favoritism showed to any (ie no single one of them would be considered "legal tender" and the rest to be secondary), then you would see the enterprises that control the respective currencies do an excellent job of avoiding inflation and deflation. It would be in their interest because they would be in competition with all the other currencies. And the people would have one or more ultra-stable currencies to choose from.

This is not my idea. The great F. A. Hayek came up with the plan and wrote about it in the 70s in his book "The Denationalisation of Money." I highly recommend it.

Rightly, you are probably thinking that this will never happen under normal circumstances. Why would government give up this power? The answer is that something cataclysmic needs to happen. The huge economic depression (yes, depression, not recession) that is coming in the next year or so should do the trick. But that's a whole other prediction . . .

By the way, this book has been made available for download for free in pdf format by the Institute of Economic Affairs in the UK. I really very highly recommend it. Really. Here you go:

http://www.iea.org.uk/record.jsp?type=book&ID=431

This subject interests me on various levels but i just wanted to obtain some serious thought and opinion about the true potential for another mega-currency in our immediate lifetime. As it has been mentioned, Europe as a collective community has a distinct shared history, the economies of the European continent have been tied together far before the "Euro Age" we see today, so the stage was set for the show we are watching now many years (maybe centuries) ago.

There has been talk of an Asian currency to tie the economies of Japan, China and Korea, perhaps even other contenders like Singapore, Malaysia and Indonesia, but i don't see the same relaitionship between those countries (economically at least) that i see within the nation-states of Europe, or even a modest enthusiasm. There is also the question of the Arab States and Iran, where much of the oil in the world lies, the main source of the worlds energy for many years to come, whether we like it or not.

There has also been talk of a North American Currency, but as we all know America plays a far larger role in the area than Canada and Mexico, it would almost be charity work. South America might also have a similar problem, where many countries would have filed for bankruptcy many years ago if they were simple businesses.

Just my thoughts...no expert here...