In 1974, Friedrich von Hayek received the Nobel Prize in Economics, and in 1976, somewhat unexpectedly, he wrote the book «Private Money». It begins with Hayek’s proposition regarding a single European currency. Hayek called the idea of a common currency a “utopia” and proposed the following solution. Hayek argued that since we have a system of central banks issuing fiat money, the solution lies not in replacing multiple territorial monopolies with one common monopoly, but in organizing competition between them. For this purpose, the participating countries of the Union must abandon the “legal tender” rule regarding their “own” currency, that is, allow the free circulation of each participating country’s currency on its territory, including pricing, settlements, and quotations. Gold coins should also be allowed, and restrictions on the activities of foreign banks from Union member countries should be eliminated. The “legal tender” rule is retained only for payment of taxes and other state levies, meaning they are accepted only in the national currency of the state imposing them.
In this situation, citizens of the Union receive the right of choice and, depending on the nature of their activities, can use different currencies. Speculators will find the “soft” currency attractive, while industrialists and merchants will prefer the “hard” one. In any case, the policy of the central bank (which in this case simply becomes a state issuing bank) of one state or another will be aimed at increasing demand for its currency, that is, will depend on how much people need it for their everyday needs. I should note that the “European values” so beloved in Ukraine became possible only because Europe for a long time represented a set of competing jurisdictions. Competition, not unification, became the cause of the freedom and prosperity of the West, and I believe that competition, not unification, including in the monetary system, will become the basis of its salvation.