The currency system is a combination of two elements – the currency mechanism and foreign exchange relations.
The currency system can be considered from an economic and organizational and legal point of view:
From an economic point of view, this is a combination of monetary and economic relations that have historically developed on the basis of internationalization of economic relations.
From the legal point of view, this is the state-legal form of organization of the country’s currency relations, which has developed historically on the basis of internationalization of economic relations and enshrined in national legislation, taking into account international standards right.
They distinguish between national, world (interstate, international) and regional currency systems.
Historically, national currency systems emerged, enshrined in national law, taking into account international law. The national currency system is an integral part of the country’s monetary system. Its main features are relative independence and going beyond national borders. These features are determined by the degree of development and the state of the country’s economy and foreign economic relations.
The national currency system is inextricably linked with the world monetary system, which is a historically established form of organization of international monetary relations, enshrined in interstate agreements (agreements). The main task of the AIF is to regulate the sphere of international settlements and foreign exchange markets in order to ensure sustainable economic growth, contain inflation, maintain a balance of foreign economic exchange and payment turnover. The world currency system was formed by the middle of the 19th century. The nature of the functioning and stability of the world monetary system depends on the degree to which its principles correspond to the structure of the world economy, the alignment of forces and the interests of leading countries. When these conditions change, a periodic crisis of the world monetary system arises, which ends with its collapse and the creation of a new currency system.
A regional currency system is created within the framework of the world monetary system of developed countries: the European Monetary System (EMU) as an organizational and economic form of relations of a number of EU countries in the foreign exchange sphere. The regional monetary system to some extent reflects the peculiarities of the functioning of economic relations in certain regions of the world. The basis of the regional and world currency systems is the international division of labor, commodity production and foreign trade between countries.
The table 1 shows the main elements of the national and world currency systems.
Table 1
The main elements of the national and world currency systems
National currency system | World currency system |
National currency National Currency Convertibility Terms National currency parity National Currency Exchange Rate The presence or absence of currency restrictions and currency control National Currency Liquidity Regulation Regulation of the rules for the use of international credit facilities Regulation of international settlements National Gold and Currency Markets Regime National Currency Regulators | International account unit or reserve currencies Terms of mutual currency convertibility Unified Currency Parity Regime Exchange rate regulation Interstate regulation of currency relations Interstate regulation of international currency liquidity Unification of the rules for the use of international credit facilities Unification of the main forms of international settlements The regime of world currency and gold markets International organizations |
Each country independently, as an equivalent of wealth exported from it, accepts a world monetary product that serves international economic relations. Gold, the national currencies of the world’s leading powers (dollar, pound sterling, etc.) can also act as international monetary goods, they are also called reserve currencies.
The world currency system is based on various forms of world money. Worldly called money serving economic, political and cultural international relations. In its development, the functional form of world money has undergone significant changes.