Monetary Definition, Exchange-Rate Determination, and a Pathway toward
Global Monetary Integration: World Currency

Lie Chun Pong

doi:10.46609/IJSSER.2026.v11i09.012

Title: Monetary Definition, Exchange-Rate Determination, and a Pathway toward Global Monetary Integration: World Currency
Authors: Lie Chun Pong
Journal: International Journal of Social Science and Economic Research (IJSSER) ISSN: 2455-8834 Volume: 11 Issue: 9 Publication Date: September 2026 DOI: 10.46609/IJSSER.2026.v11i09.012
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Lie Chun Pong Research Scholar
MLA 8 Pong, Lie Chun PongLie Chun. "Monetary Definition, Exchange-Rate Determination, and a Pathway toward Global Monetary Integration: World Currency." Int. j. of Social Science and Economic Research, vol. 11, no. 9, Sept. 2026, pp. 4647-4654, doi.org/10.46609/IJSSER.2026.v11i09.012. Accessed Sept. 2026. APA 6 Pong, L. (2026, September). Monetary Definition, Exchange-Rate Determination, and a Pathway toward Global Monetary Integration: World Currency. Int. j. of Social Science and Economic Research, 11(9), 4647-4654. Retrieved from https://doi.org/10.46609/IJSSER.2026.v11i09.012 Chicago Pong, Lie Chun PongLie Chun. "Monetary Definition, Exchange-Rate Determination, and a Pathway toward Global Monetary Integration: World Currency." Int. j. of Social Science and Economic Research 11, no. 9 (September 2026), 4647-4654. Accessed September, 2026. https://doi.org/10.46609/IJSSER.2026.v11i09.012.
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ABSTRACT: This research initiative on “World Currency,” based on my original concept, began in the year of 1995 and was formally proposed and submit as a research paper, during the year in 2003- 2004 as part of the MSc Economics Project at HKUST. The definition of money and the determination of exchange rates have long been central concerns in macroeconomics. This formation and evolution of monetary institutions, together with the pricing of currencies, have contributed significantly to the development of modern monetary economics. Nevertheless, despite the extensive use of theoretical assumptions and formal models, economists have found it difficult to derive a single, empirically reliable measure of a currency’s “fundamental” or fair exchange rate [1-6]. The market values of major international currencies fluctuate continuously, and these movements cannot always be explained by conventional monetary or exchange-rate theories. Foreign-exchange markets are driven by enormous financial flows: trading in major currencies amounts to trillions of monetary units each day [1-12]. Yet exchange-rate determination depends not only on transaction volume. It also reflects expectations, market sentiment, portfolio allocation, policy intervention, and the strategic behaviour of major participants, including the central banks of the G7 economies and large hedge funds. The extent to which such actors can influence exchange rates remains an important theoretical and empirical question. This paper proposes a conceptual pathway model for analysing global monetary integration. It examines how monetary formation mechanisms influence currency values and how monetary structures are organised. The central argument is that a currency’s value has both internal and external dimensions. These may include foreign-exchange reserves, natural resources, technological capacity, national economic strength, institutional credibility, and public confidence. Exchange rates therefore reflect not only macroeconomic fundamentals but also collective outcome and collective expectations with social perceptions of economic security. This paper reviews selected insights from modern monetary and financial economics, identifies limitations in the existing international monetary system, and considers institutional reforms that might improve global welfare. Particular refinement is given to the possibility of a global world single currency, a new basket-based valuation mechanism, coordinated monetary governance, and an international system for liquidity provision and welfare transfers.

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