like the fact that $100 in jamaica is like $10 here & etc.. why couldn’t we all use the same currency? or not even the same currency specifically but like have $10 here be the same thing as $10 in canada or $10 in africa etc etc.
In: Economics
u/Fruit522 didn’t seem to actually answer your question (that being why there isn’t a single global currency). While I imagine there are many reasons for it that I’m not knowledgeable enough to speak on, one simple reason is that it’s simply not practical.
Let’s imagine that all countries must use the most valuable currency, the kuwaiti dinar which converts to about 0.30 per US dollar. The poorest countries would have a hard time using this currency because there isn’t enough divisions in it. In many poor countries certain products cost less than 0.01 of a kuwaiti dinar or even less than a penny USD. The “minimum price” of all goods would be rather high for them.
Now imagine if all countries must use the least valuable currency (not counting countries that are unstable), the iranian rial which converts to about 42,070 per us dollar. Developed countries would instantly have to us Zimbabwe-esque 400,000 rial bills as the equivalent of ten bucks. Paying the bill at a restaurant in cash would probably need more cash than your wallet could hold unless there were big value bills.
Of course this problem doesn’t actually apply anymore if we abolish the use of physical money and opt for electronic payments for all purchases. This would allow any amount of divisions and no one would care if they had inflated values because it’s just numbers and not physical ‘stuff’ to carry around.
That’s just one problem, I’d be happy if someone more knowledgeable could chime in with more.
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