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Comment by JumpCrisscross

2 months ago

> steady building up of alternatives will happen until one day the reserve currency status will change hands all of a sudden

This is not how it has ever happened. Instead, we’ll see a gradual erosion as the world switches to multi-polarity and spheres of influence. (And, with decreasing international trade, every country’s reserve mix will vary.)

4 comments

JumpCrisscross

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detourdog  2 months ago

I agree that the next wave may not be dominated by a single currency. I also think that is a superior system. I think the BRICS system is based on honoring multiple currencies rather than using a single currency for settlement.

  • JumpCrisscross  2 months ago

    > that is a superior system

    It’s more robust and less efficient. Transaction costs—and opportunities for middlemen—will increase. But the chances that your country’s economy is entirely shut down on the whim of one man in Washington is reduced.

    > the BRICS system is based on honoring multiple currencies

    The BRICS system is nonsense, as evidenced by basically nobody using it beyond a totem amount. Both the PBoC and RBI have superior settlement systems they could open up if they wanted to. Neither does because neither wants an unrestricted capital account.