A new ‘currency’ was launched yesterday, when the WDX Organization used its synthetic Wocu – world currency unit – to buy some plonk on the Bordeaux Wine Exchange. The symbolic trade will, WDX hopes, lead to swift acceptance and use of the Wocu as an international global unit of account.
Ostensibly, the Wocu is little different from other basket products offered by numerous banks. It is made up from the currencies of 20 countries, including the Bric nations. Where it perhaps differs from bank offerings is in its independence. WDX has established an institute to ensure its integrity and it hopes that its proven low volatility – it has been back-tested over 10 years – will help to increase its chances of acceptance.
Obviously, the timing of the Wocu’s launch looks fortuitous, given the widespread posturing on the need for an alternative reserve currency to the USD. Whether or not it does develop into a ‘proper’ currency remains to be seen. This has happened successfully before; the ECU, created in 1979, eventually evolved into the EUR. However, the creation of the ECU was backed by a clear and strong – in most cases – political will across Europe.