Currency competition is a monetary system in which private entities print money (usually backed by a valuable, exchangeable commodity such as gold or silver) in order to satisfy the demand for a simple, low-cost method of trading goods and services. Competition in currency is relatively rare today, as most countries enforce fiat currency monopolies in which single, nationalized currencies controlled by central banks is declared legal tender. In such uncompetitive environments, critics argue there is no separation of money and state.
The term currency competition is also used to describe the relationship between separate fiat currencies in the global economy. In this sense, two or more government-issued currencies, such as the United States dollar and the Euro of the Eurozone, retain domestic monopoly status but compete with each other across international borders.
Zimbabwe has adopted currency competition of several fiat currencies as a response to years of hyperinflation.
Famous quotes containing the words currency and/or competition:
“It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic, and sub-atomic, and galactic
structure of things today. And you have meddled with the primal forces of nature! And you will atone! Am I getting through to you, Mr. Beale?”
—Paddy Chayefsky (1923–1981)
“Never before has a generation of parents faced such awesome competition with the mass media for their children’s attention. While parents tout the virtues of premarital virginity, drug-free living, nonviolent resolution of social conflict, or character over physical appearance, their values are daily challenged by television soaps, rock music lyrics, tabloid headlines, and movie scenes extolling the importance of physical appearance and conformity.”
—Marianne E. Neifert (20th century)