World Currency: US $

[dimpy.handa]

Dollarization reduces the risk of inflation. Governments, especially in developing countries, are very bad at controlling inflation. They always want to increase short term growth at the expense of long term stability. Governments should tie their own hands through dollarization to make their anti-inflation rhetoric credible. The fear of high inflation is a major factor inhibiting investment in developing countries.

 

[dimpy.handa]

On the other hand dollarization means that the country can no longer tailor its monetary policy to suit its own needs. Unless its economy closely tracks the US economy, that can be a serious limitation at times. Nevertheless the discipline required might be worth the loss of flexibility. The added stability should offer a better environment for planning business expansion and new enterprise. Under dollarization the central bank would no longer be able to create money, but it would still retain the important task of administering banking system regulations and ensuring sound banking practices

 

[swatiraohnlu]

In addition to the idea of a single world currency, some evidence suggests the world may evolve multiple global currencies that exchange on a singular market system. The rise of digital global currencies such as Ven suggest that multiple global currencies may offer wider formats for trade as they gain strength and wider acceptance.