Research Information System
37th International Scientific Conference on Economic and Social Development - Socio Economic Problems of Sustainable Development, Baku, Azerbaijan, 14 - 15 February 2019, pp.1375-1380, (Full Text)
The world monetary system is a mechanism that links the economies of individual countries into a global economy. Therefore, any violations arising in the functioning of the global monetary system lead to significant problems in the development of the economy of separate countriesandthe world economy as a whole. Historically, the world monetary system passed through four stages in its development. The first world monetary system was the gold standard system. The existence of the gold standard prevented inflation and ensured the equilibrium of balance of payments of states. The next stage was the period of the Genoa currency system. During this period, only some currencies including the British pound sterling and the US dollar began to be considered as gold equivalents. The Bretton woods monetary system was adopted in 1944, which consolidated the leading role of the United States and its currency in the world monetary system, due to the post-war economic power of this country. Under this system, only the US dollar was pegged to gold and exchanged for gold at the request of central banks of other countries. The Jamaican currency system replaced the Bretton woods monetary system in 1971. According to the new system, the rate of the currency of each country began to change according to changes in supply and demand in the foreign exchange market. The modern monetary system is based on the functioning of two currencies, the US dollar and the Euro. Unfortunately, exchange rate fluctuations of these leading currencies negatively affect the economies of other countries. Some experts consider cryptocurrency as the global currency of the future global monetary system. The current situation in the global economy confirms that the world monetary system will inevitably be transformed and this process will be long, ambiguous and possibly not predictable.