Evolution of currency integration within regional associations: International legal aspects

Abstract

The relevance of the study is due to the growing role of currency integration as a key factor in the formation of the global currency and financial system and ensuring economic stability in the world.  In the context of increasing regionalization processes in international economic relations, currency integration appears not only as an economic but also as an international legal phenomenon that requires comprehensive analysis.

The purpose of the article is to identify the patterns of its evolution and characterize individual components of international legal mechanisms that regulate the functioning of monetary unions in different regions of the world, based on a comprehensive study of the development of currency integration within regional associations.

The research methodology is based on the use of systemic-historical, comparative-legal, analytical, and formal-legal methods, which allowed us to trace the evolution of currency integration from ancient monetary unions to modern supranational currency systems.

The source base consists of international treaties, regulatory legal acts of regional associations, documents of international currency and financial institutions, and scientific works of leading researchers.

The results of the research show that currency integration developed in stages: from the creation of local monetary unions in Ancient Greece and medieval Europe to the formation of full-fledged monetary unions in the 19th–20th centuries, and the modern highest forms of integration - economic and monetary union. The process has developed particularly well within the European Union, where the institutionalization of the European Central Bank and the introduction of the euro have become a model of deep currency integration based on the international legal principles of the Maastricht Treaty. The experience of West African monetary unions is analyzed, in particular the transformation of the CFA franc into the Eco currency, which symbolizes the desire for economic independence of the countries of the African continent, as well as the trends of currency integration in the Asia-Pacific region within the framework of the ASEAN+3 initiative. The role of the International Monetary Fund, the Bank for International Settlements, and the World Bank in creating the legal framework for international currency cooperation is revealed. It has been established that currency integration contributes to reducing transaction costs, strengthening regional capital markets, reducing the impact of currency risks on the results of foreign economic activity, and increasing the competitiveness of national economies, but at the same time it is accompanied by restrictions on the currency sovereignty of states, as well as on the ability of states to stimulate the development of the national economy using monetary and financial means.

The conclusions emphasize that currency integration is a complex multi-level process that combines economic benefits with political and legal challenges. It is based on a balance between national interests and the need for joint international legal regulation of monetary and financial processes. The international legal aspects of this phenomenon involve the formation of a system of supranational norms and coordination mechanisms capable of ensuring the stability and predictability of regional currency systems. It is advisable to direct further research towards a comparative analysis of the effectiveness of international legal mechanisms that regulate the functioning of monetary unions in different regions of the world, and to determine the prospects for Ukraine's participation in regional and global monetary and financial initiatives.