Is EEU returning to single currency unit?

The Eurasian Development Bank proposed the Eurasian Economic Union (EEU) member countries to create a single currency unit for calculations, the Director of the Centre for Integration Studies at the Eurasian Development Bank Evgeny Vinokurov said.

"There are some instruments designed for long-term use, which we propose to be discussed by monetary regulators. For example, a single regional currency unit, which would facilitate mutual calculations," the Izvestia newspaper cited him as saying.

As an example of a single currency unit,he cited the European Currency Unit (ECU), which was used in Europe in 1979-1998.

At the moment, Kazakhstan supports this initiative, but this issue has not yet been discussed with the EEU member countries.

The Director of the Institute of Strategic Planning and Forecasting, Professor Alexander Gusev, speaking to Vestnik Kavkaza, said that he agreed with Kazakh President Nursultan Nazarbayev that the creation of a single currency unit is a necessary element of integration.

"As for currency units, is is an intermediate stage from national currencies to a single currency of the Eurasian Economic Union. It is necessary because it will create a full-fledged market of currencies, labor, capital flows, goods and services. I totally support this idea because I believe that a state formation can be full-fledged only if the number of consumers exceeds 200 million people," the expert explained.

He stressed that Eurasianism can be implemented only within the framework of economic and political strategy. "If we talk about politics, the unification strategy here is the signing of the CSTO treaties, that is, first of all, the security system. And in the economic sphere one of the reasons for full integration is the transition to single currency units and, subsequently, the transition of the EEU member countries to a single currency," the Director of the Institute of Strategic Planning and Forecasting pointed out.

Commenting on the possibility of using blocking technology, he drew attention to the fact that any mechanisms that lead to closer integration are necessary and welcome.

The expert added that integration is not a quick process. "This is due to the positions of individual countries, pragmatism often comes to the fore in economics. But here we have to move from simple to complex," the Director of the Institute of Strategic Planning and Forecasting noted.

"Integration is beneficial for any country that is part of some union. In the case of the EEU, respectively, it is beneficial for all five countries that are part of it," Alexander Gusev concluded.

The associate professor of the department of finance, money circulation and credit of RANEPA, Maxim Safonov, also expressed confidence in the need for a single currency unit.

"New currencies are undoubtedly necessary, for example, the popularity of bitcoins clearly shows it. So whether it will be an issue of unified calculation rules within the EEU or something else, in any case, it is necessary and important. It's a matter of time whether this currency will remain internal or become a great international currency," the expert believes.

Concerning a blockchain technology, the economist recalled that any currency or group of currencies is built into a more complex system of relations, in total there are more than 50 different groups of currencies that work differently.

"This single currency unit exists only in theory now. Time will tell how effective and viable it will be," Maxim Safonov summed up.