ABSTRACT
This chapter argues, and in small part substantiates, that e-commerce, regional economic integration, and global liberalisation have eroded the monopoly of small currencies in their home markets. Monetary union is becoming a less and less optional companion of economic union which gives political definition to an economic region. With fiscal and monetary policy risks decoupled and intraregional currency risk eliminated, credit to first-rate private obligors can involve less default risk than credit to their fiscally unsound governments. The medium-term evolution to monetary unions that appears to be underway does not denationalise or privatise money because the money involved remains a creature of the fiat of a state or group of states. Cross-border e-banking, e-investing, and e-commerce of all kinds can compete not only with domestic financial and business establishments but also with local currencies that provide inferior consumption insurance at currency-crisis cycle frequencies. Countries can use only very few other currency denominations for borrowing in international financial markets.
