Abstract
Currency nominalism is the practice of strictly adhering to the nominal value of a currency, without considering its actual value or the economic conditions that support it. Although this approach may offer stability in a financial system, it has the potential to undermine the legitimate expectations of parties engaged in commercial transactions. To address this issue, it is imperative to enhance economic stability and certainty, while safeguarding commercial relationships against inefficiencies and disruptions. Parties can reduce the impact of currency fluctuations and minimise unfavourable outcomes by considering these risks when entering into contractual agreements.
This study provides a thorough analysis of the concept of currency nominalism and its consequences for individuals involved in commercial transactions. This analysis explores the constraints imposed by nominalist policies on parties’ capacity to precisely evaluate and control financial risks linked to volatile currency values. In addition, it suggests alternative methods for determining the value of currency, such as flexible exchange rates and managed floating systems, which give more importance to the evaluation of actual economic factors. This analysis explores the potential advantages and obstacles linked to the adoption of these alternative systems to improve the predictability and equity of commercial transactions.