There are more than 100 recognized currencies in the world, but they can drop to five or six in the next 20 years, said Brazilian economy minister Paulo Guedes said at the World Economic Forum (WEF).
According to him, a common currency was introduced in European countries 20 years ago, allowing, for example, the French to travel to Germany without having to change cash, CNBC reported.
This may happen again in other parts of the world in the future, provided that the currencies provide themselves politically or economically.
“If you consider the political dimension and the economic dimension, we would have five, six currencies 20 years, 30 years from now,” he said.
“There would be one continental currency, the euro, another ‘continental currency’ the dollar-dominance-area and China would have their currency – there are 200 million oversees Chinese, these people live in the Philippines, they live in Malaysia and they trade with China, they go back and forth all the time and they are trading renminbi’s and they will not keep liquidating their grants and debts using dollars,” Guedes said supporting his idea of a fewer yet stronger currencies around the world.
The IMF’s chief economist Gita Gopinath, in her turn, said this was a scenario of “pretty low probability.”
“Given what we know now and unless there are major wars that take place or serious walls that get built everywhere, assuming that doesn’t happen, I think it is a pretty low probability scenario that would happen,” Gopinath said. “There cannot be a tiny possibility that you would not be a zone the way it is now in the future.”