Around 120 years ago, the editor of The Economist Mr. William Bagehot expressed his vision of forming a single currency union for the entire Europe. When two or more nations share the same currency without any economic integration or technical deviations, then those countries form a currency union.
Informal currency unions are composed of countries that have adopted a foreign currency unilaterally. Formal currency unions adopt a foreign currency by the virtue of some bilateral agreements. A formal currency union with common policies is always composed of many countries that have adopted a currency on the basis of a formal agreement by an issuing authority.
Currently, there are around 19 currency unions in the world, with the latest being the EURO. It seems that the Eurasian Economic Forum (EEF), comprising Russia, Kazakhstan, Belarus, and Armenia, are seriously considering the establishment of a new currency union when Kyrgyzstan joins EEF. The largest currency union is the EURO and the smallest one is Eastern Caribbean Currency Union (ECCU).
Discussions are currently being conducted on future currency, for example, the Russian President Putin has directed the Central Bank of Russia to work with other central banks to determine the terms of future integration. The deadline for establishing these terms and conditions is September 2015. Past trade stipulations by Eurasian countries show that they are going ahead with the plan for a currency union and the first step is to remove trade tariffs.
The new currency will look almost like the Ruble but with certain features of the Euro. The Eurasian Economic Union which was established on January 1, 2015 by a treaty between Kazakhstan, Belarus, and Russia has created a powerful regional market that unites more than 170 million people.
