From Shared Identity to Shared Currency along the Belt and Road: How Cultural Integration Drives Successful Monetary Union

“If I were to do it again from scratch, I would start with culture” (Jean Monnet) The integration of economic and cultural factors is crucial for successful monetary cooperation among countries. Inspired by Jean Monnet’s reflection on European Integration, this research examines how cultural similarities impact monetary union formation. Using a constructivist approach and Optimum Currency Area (OCA) theory, along with Hofstede’s cultural dimensions, I quantify cultural proximity and analyze trade activity among Belt and Road member-states. While the idea that culturally similar countries may cooperate more effectively might seem intuitive, this study provides empirical evidence and a theoretical framework that quantifies and explains the mechanisms behind this relationship. The findings suggest that cultural proximity enhances the likelihood of successful and swifter monetary integration, and offer practical insights for policymakers. The data, categorized and verified against trade activities with China, support this hypothesis. While limitations exist due to the hypothetical nature of the scenario, the study provides a foundation for further exploration into the cultural aspects of economic integration.