nine Latin American nations said Saturday they plan to use a new currency dubbed the ''sucre'' for trade among themselves starting in January.
No sucres will be printed or coined, but the virtual currency will be used to manage debts between governments while reducing reliance on the U.S. dollar and on Washington in general. (via Leftist LatAm Bloc to Begin Using Its Own Currency - NYTimes.com).
Closely behind
Quick on the heels, was the initiative by the Gulf Cooperation Council (GCC). The Wall Street Journal reported,
A Gulf monetary council will be tasked with deciding on the peg of a proposed single currency among Saudi Arabia, Bahrain, Qatar and Kuwait and timeline to launch the currency ... The launch of the currency will be preceded by coordination of monetary and fiscal policies and the creation of a regional Central Bank, Kuwait's foreign minister said ... The United Arab Emirates, the second-largest Arab economy, pulled out from the project in May, citing dissatisfaction over the choice to base the regional central bank in Saudi Arabia ... The U.A.E. is the second Gulf state to abandon the monetary union plan after Oman's exit three years ago. Kuwaiti officials have said they will work toward convincing the United Arab Emirates and Oman to rejoin the project. The monetary union project, which has been in the works since 2001, has been dogged by delays and debates over technical issues such as the currency peg.
A proposed name for the GCC currency, Khaleeji, was shot down.
Half success
To start with, full and complete success should neither be expected, planned or projected. The aim should be for a 'half-success' - just like 'half life' in physics, for radioactive substances. Just like half-life can continue, technically, to nearly infinity, so also, currency systems will need to innovate and modify continously.
What will be a half-success, for the 'Sucre' /GCC Currency, is if these :-
- Last for five years.
- Are used on at least 50% of intra-Latam /GCC transactions.
- Currencies are regularly traded - even if, initial volumes are low.
- Other trading blocs, banks, currency exchanges start offering futures and options contracts, trades and settlements.
- Initiatives 'inspire' other blocs to start work on another similar currency.
They got da jaundice
2ndlook had proposed a global virtual currency which would work on trading platform, based on weighted exchange value of all member currencies.The 'sucre' and the 'Khaleeji' is good first step in that direction - even if it fails. Western press has seen it with a jaundiced view.
Anything surprising with that?
