I have just been reading a 1976 pamphlet by F. A. Hayek, who won the Nobel Prize for economics in 1974. In this pamphlet, entitled Choice in Currency, Hayek suggests an interesting alternative to monetary union. He writes as follows:
At this moment it seems that the best thing we could wish governments to do is for, say, all the members of the European Economic Community, or, better still, all the governments of the Atlantic Community, to bind themselves mutually not to place any restrictions on the free use within their territories of one another’s – or any other – currencies, including their purchase and sale at any price the parties decide upon, or on their use as accounting units in which to keep books. This, and not a utopian European Monetary Unit, seems to me now both the practicable and desirable arrangement to aim at. To make the scheme effective it would be important, for reasons I state later, also to provide that banks in one country be free to establish branches in any of the others.