WE NEED A NEW STANDARD OF CURRENCY EXCHANGE!

ALLAN SAID; Sal... would it make sense to drop the American dollar as our trading currency and develop a new base currency strictly for exchanges between different monetary systems?

SAL SAID: Yes! In fact, economists have discussed versions of this idea for decades. 

The question isn't whether it makes sense in principle... it does! 

The challenge is getting enough countries to adopt it!

The basic idea is to separate the unit used for international trade from national currencies. 

Instead of Canada paying in U.S. dollars, for example, Canada would pay in an international settlement currency. The U.S. would then receive the equivalent value in U.S. dollars through the settlement system.

There are several advantages:

• Countries would no longer need to hold enormous reserves of U.S. dollars.
• Trade would become less vulnerable to U.S. monetary policy or sanctions.
• Exchange-rate risk could be reduced because each country's currency would be converted only once, into the settlement currency.
• No single country would receive the enormous economic privilege that comes from issuing the world's reserve currency.

This idea isn't entirely new.

One example is the IMF Special Drawing Rights (SDRs). SDRs are a basket of major currencies and already exist as an international reserve asset. 

However, they are used mainly between governments and central banks rather than for ordinary trade!

Another proposal came from John Maynard Keynes in 1944. 

He proposed a global clearing currency called the Bancor! 

Under his system:

• Every country would keep its own currency.
• International trade would be settled in Bancors.
• Countries with persistent trade surpluses and deficits would both be encouraged to rebalance, making the system more stable.

The proposal lost to the American-backed system, which established the U.S. dollar as the world's dominant reserve currency after the Bretton Woods Conference.

Today, the idea is receiving renewed attention because:

• China wants to reduce dependence on the U.S. dollar.
• The BRICS countries are exploring alternative payment systems.
• Digital payment networks and central-bank digital currencies make international settlement technically much easier than it was 80 years ago.

My own assessment:

I think the long-term trend is toward two layers of money:

1. National currencies (Canadian dollar, euro, yen, etc.) used by citizens and businesses within each country.
2. A neutral international settlement currency, likely digital, used only between banks and governments for cross-border transactions.

People might never even see the second currency. 

A Canadian company would still invoice in Canadian dollars... the banking system would automatically convert the payment into the settlement currency... and then into the recipient's local currency!

That approach would preserve national monetary sovereignty while reducing dependence on any one country's currency.

Ironically, advances in AI and distributed financial technology could make such a system practical. 

AI could continuously optimize exchange rates, monitor liquidity, detect fraud, and balance settlement flows in real time... making a neutral global clearing currency much more efficient than was possible when Keynes first proposed the Bancor!

***

If the global monetary system changes substantially over the next 20–30 years, I think it is more likely to evolve toward this kind of neutral settlement layer than toward a single world currency. 

It offers many of the efficiencies of a common trading currency without requiring countries to give up control over their own domestic money.

ALLAN SAID: That's what I thought... and do you have a name for this exchange currency?

SAL SAID: If someone were designing this from scratch today, I'd avoid names tied to any existing country or political bloc. 

The name should convey neutrality, stability, and function!

Here are a few possibilities I think would work well:

Name	Comments
Terra	Suggests "the world." Simple and memorable.
Nexus	Implies connection between monetary systems.
Unis	From "universal settlement." Short and easy to pronounce.
Merca	Derived from "mercantile." Trade-focused.
Globa	Straightforward global identity.
Concord	Emphasizes cooperation rather than politics.
Axis	A central point around which currencies rotate.
Equa	From "equilibrium" or "equal exchange."
Unita	Suggests unity while remaining politically neutral.
Bridge	Symbolizes connecting national currencies.

If it were my project, though, I'd probably choose something even more descriptive.

Instead of calling it a currency, I'd call it an "International Exchange Unit!" (IEU)

Countries wouldn't "hold IEUs" the way they hold dollars today. 

Instead:

• Canadian dollars → IEUs → Japanese yen
• Euros → IEUs → Mexican pesos
• Australian dollars → IEUs → Brazilian reais

If you owe... It's I.O.U!

If you exchange... It's I.E.U!

The IEU would simply be the common denominator through which all exchanges pass.

That has a psychological advantage as well. 

People don't feel like they're adopting someone else's money. They're simply using a neutral accounting unit, much like the internet uses common protocols to move information without replacing everyone's computers.

Knowing your interest in creating enduring concepts, I might even go one step further and coin a term specifically for this role:

The Exchange Standard: (XS)

The idea is that it's not a currency in the traditional sense... it's a standard of exchange! 

Every national currency would be valued relative to the XS, and AI-driven settlement systems could handle the conversions instantly behind the scenes.

I actually like Exchange Standard because it shifts the conversation away from "Who controls the currency?" to "What is the common standard for fair exchange?" 

That framing may make the concept more politically acceptable!