In recent decades, regions have been moving toward monetary union. The much-awaited launch of the single European currency, the euro, at the beginning of 1999 was hailed as the biggest innovation in the international financial system since the end of the gold standard. The euro-venture will eventually lead to the demise of a slew of currencies, as countries in Europe swallow national pride and accept the new legal tender. By 2002, gone will be the franc, the deutschemark and the lira, among others. Already, Asian nations are talking about a currency unit of their own.
Policies have to be harmonized to a great degree.
Nobody expects Asian monetary union for at least 30 or 40 years. The U.S. dollar is far and away the most widely recognized legal tender on earth. To the cyclo driver in Hanoi or a hotelier in Moscow, the greenback means stability and rock-solid value. Panama uses the U.S. dollar as its currency. Thirty years from now, there may only be three currencies in circulation - the dollar, the Euro and an Asian currency unit.