In 1944, at the Bretton Woods Conference, Keynes, an eminent economist, proposed Keynes Plan, applying bancor as the unit in settlement and accounting among different currencies. It is the first time in the history of human currency that the concept of super-sovereign currency appeared, offering a rudiment for world currency. Although the plan had been discarded, it showed a feasible solution to our world currency system.
As far as I'm concerned, the growing influence of Bitcoin in the world's financial and economic structure has been strengthening its global consensus, Bitcoin will ultimately become a kind of super-sovereign currency that affects the world order. That is determined by not only the characteristics of Bitcoin itself, but the trend that human society is bound to turn fairer.
So what is sovereign currency and super-sovereign currency?
Sovereign currency is guaranteed by credit of its government. That is what we called legal tender whose value risks going zero the instant the country's economy collapses.
Super-sovereign currency is a reserve currency with a stable value standard, decoupled from the sovereignty of all countries yet accepted by all of them. It exceeds all national sovereignty and is not restricted by any single sovereignty. Only this kind of currency can effectively serve as international settlement tool, which is inevitable in economic globalization and global integration.
The concept of super-sovereign currency has been around for a long time. As I said earlier, Keynes advocated the overthrow of the international monetary system anchored by sovereign currencies. However, the story of super-sovereign currency is even longer since gold and silver belong to currencies beyond sovereignty. Both gold standard and silver standard can be regarded as monetary systems anchoring the super-sovereign currency. In fact, in the past 500 years of business history in human civilization, the international monetary system has already chosen super-sovereign currency from the beginning when globalized market was set, rendering gold and silver the anchor of world economy even when sovereign currency is the global currency.
As I said earlier, the last half century is the most unreasonable years in currency history of human society in that the issuance of global currency has no constraints with no precious metal value as the support, laying a fatal danger for the entire world economic order and leaving various economic crises and financial disasters in our society.
Whenever a financial crisis breaks out, human civilization will once again face an ancient and unresolved problem, that is, what kind of international reserve currency can truly maintain global financial stability, promote the healthy development of the world economy and build a steady and harmonious world. In history, silver standard, gold standard, the gold exchange standard, Bretton Woods monetary system and Keynes Plan are all arrangements to deal with that problem. However, to this day, it has not been resolved but festered due to the internal defect of the current international monetary system. It was not until 2009 that Satoshi Nakamoto created Bitcoin and gave the ultimate solution to that ancient headache. Bitcoin can well work as the super-sovereign currency of human society and as the anchor of international economy and trade.
Theoretically, the following basic characteristics are required for an international reserve currency to truly anchor the world economy.
1. Clear issuance rule and orderly supply;
2. Flexible and timely adjustment to total supply according to specific needs;
3. Its regulation must go beyond the economic condition and interest of any single country.
At present, employing the sovereign credit currency of a single country as an international reserve currency is a rare case in history, as I mentioned, it's rather unreasonable. Human society must creatively reform and improve the existing international currency system to fundamentally maintain global economic and financial stability. In my opinion, Bitcoin is the best option.
1. The issuance of Bitcoin is controlled by algorithm, tamper-proof and fair to all participants. No cheat is allowed;
2. No single force can control Bitcoin, and the release and operation of Bitcoin is completely decentralized;
3. The launch of Bitcoin belongs to POW mechanism, which requires mining machines and electricity;
4. The difficulty of Bitcoin mining can alter automatically conforming with the changes in hashrate;
5. The total amount of Bitcoin is limited, effectively avoiding over-issuance and inflation.
These are the most basic features of Bitcoin. It owns some characteristics of gold and advantages that gold does not have and is the best choice for super-sovereign currency. Maybe someone would say that the price of Bitcoin is very volatile, not suitable to be the international reserve and settlement currency. As I see it, this counts on the current stage of Bitcoin. It is still in the earliest stage of Bitcoin's development, far from reaching global consensus. In one to two decades, when the price of Bitcoin reaches 1 million or even 10 million dollars, the overall market value of Bitcoin can completely cover the economic behavior of the entire world, then its price will tend to be stable. At that time, a new currency system centered on Bitcoin will be formally established. That is the necessity for human civilization to forge ahead and on one can resist.
I firmly believe that Bitcoin will truly become a super-sovereign currency in the next ten to twenty years, anchoring the economic and financial order of human society. What do you think?
Thank you for your article for allowing me to fully understand the story of the super-sovereign currency. I think this is a good expectation. As for when it will be realized, it seems a long way to go. I firmly believe that but I choose to reserve my opinion. I do not have the high theoretical level of yours.
Why do we need a super-sovereign currency?
- The further demand of economic globalization, but in the face of the US dollar-based SWIFT settlement system, people feel that there is no freedom and it is completely controlled by the United States.
- The risk of sovereign currency is that once the country’s economy collapses, the value of the sovereign currency will quickly clear to zero. This kind of thing happens especially in some underdeveloped countries with abundant resources, and at least they don't have much right to speak in international trade. Take Zimbabwe, for example. The actual value of one trillion yuan is less than 10 U.S. dollars.
Why is super-sovereign currency difficult to achieve?
The super-sovereign reserve currency is a "new reserve currency with stable customized benchmarks and accepted by all countries" that is decoupled from the sovereignty of all countries.
- Bitcoin is very difficult to anchor value. For many sovereign countries, some hope that Bitcoin will anchor diamonds, some hope that they will anchor oil, and some hope that they will anchor graphene. , It is difficult to unify opinions.
- Bitcoin is currently experiencing huge volatility, and the price cannot stabilize. After 20 years, we cannot accurately predict it. I also hope that the price will stabilize.
- Currently, the SWIFT settlement system is used globally. The United States does not allow Bitcoin to become a super-unsovereign currency, because the United States, as an emptied country, is completely supported by a financial virtual economy. Without the real economy, the United States has become accustomed to plundering the world's resources through the tide of the dollar.
- It is difficult for super-sovereign currencies to form a unified global consensus. Bitcoin needs time and more tolerance.For example, the Keynes plan mentioned in the OP article.
- Countries with large resources, powerful military countries, underdeveloped countries, countries with different ideologies, countries with different religions, etc., it is difficult to balance sovereign countries and interest groups, and it is difficult to formulate a plan that can satisfy the interests of all parties. And many countries are very unfriendly to Bitcoin.
- Bitcoin is still very young. The first step is the support of major powers. I hope Bitcoin can get the absolute support of Wall Street alligators and giant whales, because in the 1960s, the International Monetary Fund launched the super-sovereign currency SDR , But it is difficult to get the support of the United States, which has a veto in the IMF. So if you want to solve this problem, you still have to look at the attitude of the United States.
I have read several articles by the author. OP is definitely a hidden novice. OP has posted so many articles in a short time. If it can be more accessible and understandable, it will be more friendly to our novices. Thank you for your contribution, thank you.
