Super Currency

AAA

DEFINITION of 'Super Currency'

A supranational currency printed by the International Monetary Fund (IMF) that would be tied to a basket of reserve currencies. The concept of a global "super currency" has been periodically discussed between world leaders as well as endorsed by 2001 Nobel Memorial Prize-winner Joseph Stiglitz and well-known business leader George Soros for years. A super currency could also be tied to a single currency, but the interconnectedness of world financial markets and concerns about the volatility that can occur as a result of the system being tied to one currency have made this idea much less popular.

INVESTOPEDIA EXPLAINS 'Super Currency'

Super-currency proponents have called for the IMF to use its special drawing rights (SDRs) - an internal international accounting system for IMF countries - to create a global super currency. The SDR was created in 1969 as a result of the Bretton Woods fixed exchange rate and is a global reserve asset based on a basket of existing currencies.

One of the most critical concerns surrounding the creation of a super currency is that the introduction of new legal tender worldwide could be a catalyst for inflation. It could also potentially weaken individual countries' currencies and usurp or complicate the functioning of existing governing financial institutions.

RELATED TERMS
  1. General Agreements To Borrow - ...

    A borrowing/lending medium for members of the Group of Ten. Members ...
  2. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. ...
  3. Special Drawing Rights - SDR

    An international type of monetary reserve currency, created by ...
  4. Currency Basket

    A selected group of currencies in which the weighted average ...
  5. Bretton Woods Agreement

    A landmark system for monetary and exchange rate management established ...
  6. USD

    In currencies, this is the abbreviation for the U.S. dollar. ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Personal Finance

    Examining Credit Crunches Around The World

    Market tops and bottoms have proliferated the financial markets throughout history. Learn how countries dealt with these tough economic periods.
  2. Forex Education

    Global Trade And The Currency Market

    Learn how the Bretton Woods system got the ball rolling for world trade.
  3. Fundamental Analysis

    An Introduction To The International Monetary Fund (IMF)

    Chances are you've heard of the IMF. But what does it do, and why is it so controversial?
  4. Personal Finance

    What Is The Bank For International Settlements?

    Get the scoop on the structure and functions of the oldest global financial institution.
  5. Fundamental Analysis

    The Best 5 Online Accounting Systems For Small Business

    Running a small business can be difficult, but thanks to these online accounting services, taking care of payroll doesn't have to be.
  6. Investing

    Understanding Cost Accounting

    Cost accounting is the method of financially allocating expenses to goods that are manufactured for resale. Cost accounting is also referred to as managerial accounting, because managers use ...
  7. Investing

    What are Prepaid Expenses?

    A prepaid expense is an asset on the balance sheet. Due to accounting principles, expenses are often accrued on the balance sheet and expensed in a later period.
  8. Investing

    What's a Sunk Cost?

    A sunk cost was incurred in the past, is independent of future events and cannot be recouped. Economists teach that sunk costs should not be considered when making a financial decision. Rather, ...
  9. Investing

    What are Fixed Costs?

    Fixed costs are business expenses that do not change as the level of production goes up or down. They are one of two types of business expense, the other being variable costs. Variable costs ...
  10. Fundamental Analysis

    What's the FCCR?

    The fixed charge coverage ratio (FCCR) is an accounting calculation that shows a company’s ability to pay its fixed costs – expenses that generally do not vary with production level. This may ...

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center