SEOUL, KOREA - With the onset of a global economy in the last century, economists and policy makers have periodically called for a“world currency reserve.
”China even proposed a “super-sovereign reserve currency” in 2009. Such a currency could reduce the financial instability, avoid currency wars and eliminate the expenses of transfer fees, and exchange rates globally. Many have dreamed of a currency that could rise above the muck and mire of national interest and stand free of irrational whims of political power.
Recently a new company, Evergreen, has launched a bold new proposal for a payment system that is free of fees, national capital controls and not subject to manipulation by financial institutions for speculation. This new proto-currency takes the form of an app that enables users to convert dollars (or other conventional currencies) into electronic Evergreen currency. Users can then create a “wallet”in the application and save or exchange their currency using it.
Joel Dietz founder, the founder of Evergreen, imagines this app to be the first step towards a transformation of the global currency system that starts not in the lofty offices of the World Bank but in the daily transactions of ordinary people.
The dream is not entirely new. In the Keynesian plan for the post-WWII economy there was a proposal for an“International Clearing Union”that would have decentralized global monetary control and taken the role of currency issuance away from individual nations. Much to the chagrin of John M. Keynes, the Bretton Woods Accord followed the proposals of Harry Dexter White who recommended that individual states should have control of monetary policy.
But the rate of global economic integration has only increased and there are new calls for a global or world currency over the last decade. But whatever the virtues of such a system might be, powerful players in finance have remained recalcitrant to change in a system that benefits them. Discussions about global currency shift like the winds as nation states try to find political advantages in their positioning.
But times are changing and there are new forces who are using new technologies and creative approaches to bring thevision of a world currency to the mainstream. Bitcoin is one such challenger, but even more the unique combination of features in Evergreen make it a promising approach.
Dietz, a self-identified polymath, has been programming since the age of six and runs the popular blog on programming languages Fractastical.com. His programming expertise gives him a unique perspective on the issue of currency and the location of Evergreen in Palo Alto makes it quite distinct fromthe big financial players in Wall Street or in the World Bank Group.
Evergreen has as its a mission to provide a digital currency infrastructure modeled on the proposals of what Dietz calls“the greatest economic minds” of the past century. His start up has, in fact, a plan to restructure the global financial system around organic growth and human interaction. He sees this new currency concept as part of a systemic shifting of values back to“objects of real value and beauty.”
Evergreen will provide a platform for exchange, and later a market currency, that focuses on the fundamentals of commerce. The interface is intentionally kept simple to facilitate the most basic aspects of market transactions: the purchasing and sales of products and services, without any schemes or fees.
Evergreen should be understood in the context of the rise of social networks and person-to-person (also known as: p2p) exchanges of information, technology, and merchandise. Suddenly organizations like Evergreenhavebeen given a new level of social efficacy as communities seek an alternative to the controls imposed by the current financial system.
Dietz compares Evergreen’s potential to organic foods, “it starts fresh by only allowing real goods and services, creating a network without the toxins that have been allowed to pollute the larger financial stream.”If the global economy is an ecosystem, Dietz sees current financial market bubbles and crashes as pollution, clear and simple.
This platform and infrastructure can assure stability, eliminating the risks associated with the current economic and monetary systems, whilecatalyzingglobal network connectivity viathis innovative payment system.
There are, however, naysayers who reject the idea of a non-institutionalized currency. Economists such as Paul Krugman argue that there is no “intrinsic value” to such electronically created currency and that they tend towards either inflation or deflation.
Evergreen asserts a new vision for its currency, claiming that it will be truly asset-backed.Dietz imagines the asset backing as a way to generate“smooth” transactions, particularly from a national currency to Evergreen or vice versa. The backing would also allow for more stability of in currency itself, allowing the currency to increase or decrease depending on pricing.
Evergreen will build an asset portfolio based on a diversification between precious metals and national currencies. The currencies will not just belong to the largest reserves (Dollars and Euros) there will also be an inclusion of smaller, but extremely stable, currencies as well (Korean Won, Norwegian Krone, etc.).
Evergreen has even discussed such innovative ideas about global currency as the “eco-currency” proposed at the Asia Institute in Seoul in 2010 by its director Emanuel Pastreich. Evergreen is looking to find creative ways to link the value of currency back to the ecosystem itself.
Evergreen’s vision extends to the realm of ecological health as an extension of the global economy. With this in mind the assets will also be, as Dietz deemed “illiquid”, environmental holdings. The holdings will include areas considered of environmental benefit like the Amazon rainforest. According to Dietz the investment will not drop below 1% of the total assets. The move looks to place the environment at a similar status as other rare or precious resources.
As of now, Evergreen is available as a free iPhone and Android app. The platform is being experimented with by a group of willing participants in Berlin, Germany, and various communities in France and Italy. Evergreen is less than a year old, but has already created a platform for global currency exchange.
More fundamental changes will be required for the adoption of an Evergreen currency system on a large scale. But the conversation about international currency clearly has moved outside the purview of the global financial overlords.
