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We show that competition among few countries in the issuance of reserve assets can have perverse effects on the total supply of reserve assets.
Conversely, states that are less supportive of the U.S. order should be more likely to shift reserve assets into yuan.
Today, the U.S. dollar is the world's most popular reserve currency, representing roughly 64percentt of global reserve assets.
Archives|GAIN OF $65,900,000 IN RESERVE ASSETS; Discounts, Acceptances and Federal Paper Totals Grow Larger in the Week.
GAIN OF $65,900,000 IN RESERVE ASSETS; Discounts, Acceptances and Federal Paper Totals Grow Larger in the Week.
Most important, its capital controls make it hard to see how holders of renminbi reserve assets can liquidate them in a crisis.
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The SDR is instead an international reserve asset which the IMF uses to supplement its member countries' reserves.
Triffin's suggested solution was to create an artificial reserve asset, tied to a basket of commodities.
He wants to tackle big subjects, such as the dollar's role as a reserve asset (see article).
Gold is seen by many as the dollar's main competitor as the world's reserve asset.
It would take years to develop SDR money markets that are liquid enough to be a reserve asset.
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