The World Currency Unit WOCU (XCU) is an EU trademarked synthetic global currency quotation. It is derived from a weighted basket of currencies of fiat currency pairs covering the top 20 economies of the world. Each country’s currency representation is weighted by its relative proportion of the top 20 economies as measured by

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...

. The WOCU’s nearest comparator was the more narrowly constructed ECU, the European Currency Unit basket that preceded the successor Euro. The WOCU offers a transparent, relatively stable currency quotation as a hub currency reference for cross border trade to reduce volatility and risk. It reacts to the economic growth and decline of constituent country economies, adjusting the prominence of their respective currencies. The WOCU is outputted in up to real time, in sub second updates. Input FX data is sourced from global aggregated FX data providers. Countries within the

Eurozone The euro area, commonly called eurozone (EZ), is a currency union of 19 member states of the European Union (EU) that have adopted the euro ( €) as their primary currency and sole legal tender, and have thus fully implemented EMU polici ...

(those that have replaced their national currencies with the Euro) are treated as individual countries in the WOCU weighting calculation. This means that some countries within the Eurozone are included, such as

Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...

, whilst others are excluded, such as

Ireland Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...

, purely on the basis of that country’s top 20 GDP qualification or disqualification. The GDP values of each country issued by the

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...

in its

World Economic Outlook The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...

forecast are reviewed as these figures become available and a biannual re-weighting of the benchmark basket performed. This means that the member countries included in the basket, and therefore their currencies, may change up to twice a year either by the weighting for their currency being adjusted (up or down) or by their fiat currency being promoted into or demoted out of the basket. This generally results in the basket consisting of 15 separate currencies, the Euro currency being common to normally 6 nation states included in the WOCU basket. Review and approval of weighting adjustments is subject to a confirmation process overseen by the WOCU Oversight Committee, a body consisting of a majority of independent persons qualified and authorized to approve or reject any change to the constitution of the WOCU. In the circumstance of a reweighting where a country changes its currency, the replacement country currency FX data will form exactly the same proportion of the WOCU and the former currency will be dropped (or reduced in the case of the Euro) in the same proportion at the same time that the relevant country officially introduces its new currency, which shall be assessed and approved by the WOCU Oversight Committee. The WOCU is used to price commodities such as

bunker fuel Fuel oil is any of various fractions obtained from the distillation of petroleum (crude oil). Such oils include distillates (the lighter fractions) and residues (the heavier fractions). Fuel oils include heavy fuel oil, marine fuel oil (MFO), ...

and as a reference currency for global investors and companies seeking to mitigate bilateral exchange rate volatility. In early 2019, Unite Global AS, a Norway incorporated provider of a Correspondent banking hub platform for cross border banking payments and real-time settlement revealed it was in discussions for the issuance and distribution of WOCU currency.

References

* Coats, Warren (1989) "In Search of a Monetary Anchor : A 'New' Monetary Standard", IMF Working Paper No. 89/82. * Staff of the International Monetary Fund (2009)
World Economic Outlook, October 2009: Sustaining the Recovery
, October 15, 2009 * Kang, Shi, Juanyi Xu (2008) "The Optimal Currency Basket with Input Currency and Output Currency", HKIMR Working Paper No. 17/2008 * {{cite journal , last=Ho , first=Lok Sang , title=Towards a New International Monetary Order: The World Currency Unit and the Global Indexed Bond , journal=The World Economy , year=2000 , volume=23 , issue=7 , pages=939–950 , url=http://www.ln.edu.hk/econ/staff/towards%20a%20new%20intl%20monetary%20order.pdf , doi=10.1111/1467-9701.00310 , accessdate=2007-07-03 , url-status=dead , archiveurl=https://web.archive.org/web/20060917172342/http://www.ln.edu.hk/econ/staff/towards%20a%20new%20intl%20monetary%20order.pdf , archivedate=September 17, 2006

External links

Official website
International finance Foreign exchange market

See also

References

External links