Thursday, January 7, 2010

SUCRE: A New International Currency

A new currency will go into use at the end of January among the left-leaning members of the Bolivarian Alliance for the Peoples of Our America (ALBA) at the end of January 2010. The first transactions will be
entirely digital as the currency is not yet printed. The currency will be called the SUCRE, an acronym for System of Regional Compensation and will be implemented by ALBA’s members: Venezuela, Bolivia, Nicaragua, Ecuador, Honduras, and Caribbean nations: Cuba, Antigua & Barbuda, Saint Vincent and the Grenadines, and Dominica. The currency will be used exclusively for large international transactions; the first of which will be a sale of rice from Venezuela to Cuba. Together the bloc encompasses over 73 million people with a combined GDP of 670 billion dollars. The SUCRE is designed specifically to replace the US dollar as a medium of exchange between nations and represents another small chip in the global dominance of the dollar. On October 16th of 2009, the leaders of the nine ALBA nations met in Bolivia for the 7th ALBA summit and President Evo Morales declared of the proposed monetary union, “The document is approved”. The SUCRE will initially only be used in electronic transactions between central banks of the member nations but plans are underway to print it for physical circulation in the future with the hope of establishing a unified currency like the Euro. Success on a scale like the Euro is highly unlikely in Latin America where current political differences with the ALBA bloc would prevent such a monetary union from gaining popularity among many of Latin America’s largest economies like Mexico, Brazil, Chile and Argentina.

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