How Cash Fosters National Identities

A nation’s cash reflects its identity and inspires cultural unity, with coins and banknotes depicting defining moments and historic landmarks of their country. It is hardly surprising, then, that a recent study shows the introduction of the euro has helped foster a European identity in participating nations, following previous work looking at how national currencies help build a sense of ‘collective tradition and memory’.

The euro study—a joint project by authors from Belgium, Italy and the Netherlands—sets out its premise in the title: ‘Common currency, common identity? The impact of the Euro introduction on European identity’. It explores the extent to which the euro’s adoption as a currency can be associated with a decrease in the number of Europeans who identify solely with their nation, and not with the wider European Union.

It found that, closely following its introduction, the euro became a symbol of the EU that held sway over citizens’ feelings of belonging within it. Specifically, the researchers found adoption of the euro was associated with a small, but statistically significant three percent reduction in people identifying only with their own country and not as citizens of Europe.

A previous study, conducted shortly after the euro’s 2003 debut, called the single currency ‘a visible link from Brussels to the daily lives of citizens.’

National Currencies and National Identities—a 1998 Canadian study—observes currencies act as a common medium of social communication, create collective experiences that can bolster feelings of belonging to a community, and contribute to a sense of ‘popular sovereignty’, providing the currency is managed in accordance with people’s wishes. This latter point is followed up in a 2015 Danish study that notes, as currency contributes to national identity, so national identity in turn feeds the perceived legitimacy of monetary organisations (such as central banks) and the currency itself.

Competitions to design banknotes are popular, whether as a fun activity for children, as in the UK this summer, or as a serious design challenge for professionals, as in Norway in 2014, (which was followed by an invitation for children to reimagine the designs). Public consultations to determine which national figures will appear on banknotes are also common, with a recent example being Canada’s search for the next face of its $5 bills. Such interactions further engage people with their currency and strengthen their sense of agency in its appearance and usage.

For centuries, cash has been valued beyond its monetary worth for its aesthetics and what it tells us about the historic and modern societies that created it. Today, the euro is one example of its wider role: bringing people of many different creeds and cultures together under one shared identity. More broadly, cash empowers people and helps balance control between central banks, governments and the public, since people will only use a currency—and put their trust and support behind it—when they feel it serves their personal and national interests.