Proposals to create a single global currency date back at least to 1944, when John Maynard Keynes proposed the Bancor (a supranational unit of account for settling trade imbalances) during the Bretton Woods conference, the same conference that created the World Bank and the International Monetary Fund.
The global currency idea has seen renewed interest in recent years. As the United States’ geopolitical primacy grows less clear, and as other countries tire of bearing the downstream costs of periodic US financial market volatility with limited strategic recourse under the currently prevailing US dollar hegemony, a wide variety of multilateral, state, and non-state actors have floated new proposals.
Special Drawing Rights (SDR’s) were created at the International Monetary Fund in 1969, as a step toward addressing imbalances in the world financial system. The IMF acknowledged in 2011 that further steps are needed, and suggested a larger role for SDR’s.
Mark Carney, Canada’s new Prime Minister and a former governor of the Banks of England and Canada, proposed “a new Synthetic Hegemonic Currency… provided by the public sector, perhaps through a network of central bank digital currencies,” in a speech in 2019, opining that “any unipolar system is unsuited to a multi-polar world.”
China has made a bid to create an alternative reserve currency known as mBridge. It launched in 2021 with key support from the Bank for International Settlements (BIS) as well as the central banks of China, Hong Kong, Thailand, and the United Arab Emirates. Although the Saudi Arabian central bank joined the project earlier in 2024, the BIS ended its participation in October the same year.
Russia has proposed a similar scheme called BRICS Bridge, focused on the needs of BRICS countries (Brazil, Russia, India, China, and South Africa), including a desire to evade international sanctions. BRICS Bridge is modeled in part on the Chinese effort to develop a common BRICS currency. However, with the withdrawal of India both elements of Russia’s plan have so far failed to gain traction.
Digital technology plays a central role in all the recent global currency proposals. Carney suggested a basket of central bank digital currencies. China’s mBridge (and so implicitly also BRICS Bridge) is based on a blockchain, the distributed ledger technology that powers Bitcoin and other cryptocurrencies.
Blockchain and distributed ledgers are also at the core of two other prominent plays in this space, led by non-state actors.
Facebook (now Meta) proposed the Libra (later named Diem) project in 2019 to serve as a global electronic currency. The project failed, having no obvious constituency beyond its corporate backers, a consortium of “elite members (Facebook plus an accompanying constellation of firms like Booking, Mastercard, PayPal, Spotify, Uber, Visa and Vodafone)”. Both the US and developing countries saw Libra as a threat, for divergent reasons. Critics derided its board as an “oligarchical plutocracy… out to enrich themselves at the expense of the public.” Facebook’s reputation was also impacted by the Cambridge Analytica scandal. Nonetheless, Libra advanced the conversation about alternatives to the US dollar, cited by Carney (above) among others.
Worldcoin, later renamed World, was proposed in 2018 with more populist positioning, as “a new cryptocurrency to establish the transparency and equal right for every citizen to be part of a global system through the collaboration between people and government.” It’s best known for its work building a cryptographically secured database of human identities, with finance as another “potential application”.
The above examples indicate substantial, ongoing worldwide pressure to reduce reliance on the US dollar as the sole hegemonic reserve currency. Based on our review, the most viable global currency proposals may involve central bank or non-governmental digital currencies, usually based on blockchain technology.
The potential for blockchain to play this role remains unfulfilled so far. As envisioned by many people, such as Gary Jacobs in a 2018 paper, “a basket of cryptocurrencies could emerge as the first prototype of a world currency whose value is backed by the total productive capacity of the entire human community.” He goes on to say, “autonomous global cryptocurrencies could dramatically reduce the control and effectiveness of existing regulatory mechanisms at the national level and generate considerable pressure for the evolution of more effective institutions for global governance.”
Citing work by Don Tapscott, Jacobs also notes that “governance need not be synonymous with centralized governmental control. The Internet is the best example of a complex global social organization that has evolved and transformed itself largely by means of decentralized multi-stakeholder networks operating as governance structures.”
Bitcoin itself is unfit to serve as a global currency. Transaction speeds are inadequate for mass consumer adoption, and the lack of know-your-customer compliance enables anonymous criminal transactions. Ethereum or other cryptocurrency platforms, however, may offer a solution.
The fact that no single digital currency has yet achieved mass adoption for financial and global governance invites the question: why or why not? The needs and their potential solutions are many. Is it just a matter of time?
| For more on global currencies, a study from the Mises Institute compares various historic proposals. For grantmakers, it should be noted that many major blockchain and cryptocurrency projects have their own foundations – nonprofit entities created to govern, fund, and support the long-term development and ecosystem growth of their respective blockchain protocols. Some well known groups and NGOs in the sector include the Ethereum Foundation, the Web3 Foundation and the Climate Collective which seeks to put investors, entrepreneurs and “digital tech to work to support climate and nature.” |