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The day after the dollar

Author

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  • Gluschenko, Konstantin
  • Voronov, Yuri

Abstract

The international monetary system based on the US dollar as the world’s dominant reserve currency has become in recent years risky and unreliable tool of international financial relations. In addition, confidence in the dollar is falling worldwide. These reasons lead to a transformation of the international currency system, primarily aimed at getting rid of the dominance of the US dollar. This transformation is still at the very beginning and it is unclear where it will come. The purpose of this paper is to consider possible directions of the transformation. This is not an attempt at forecasting, but an analysis of potential scenarios with assessments of the feasibility of their implementation. We are discussing a range of possible paths for transforming the international monetary system. One end of the range is the creation of a single supranational currency based on the reformation of Special Drawing Rights (SDR). The other end is the disintegration of the single currency system, which is partly already underway. In between is a return to the gold standard and the displacement of the US dollar by renminbi. However, an unpredictable option due the digitalization of currencies is also possible.

Suggested Citation

  • Gluschenko, Konstantin & Voronov, Yuri, 2025. "The day after the dollar," MPRA Paper 125275, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:125275
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    References listed on IDEAS

    as
    1. C'elestin Coquid'e & Jos'e Lages & Dima L. Shepelyansky, 2023. "Prospects of BRICS currency dominance in international trade," Papers 2305.00585, arXiv.org.
    2. Célestin Coquidé & José Lages & Dima Shepelyansky, 2023. "Prospects of BRICS currency dominance in international trade," Post-Print hal-04641803, HAL.
    3. Marie Fare & Pepita Ould Ahmed, 2017. "Complementary currency systems and their ability to support economic and social changes," Post-Print halshs-01623361, HAL.
    4. Arslanalp, Serkan & Eichengreen, Barry & Simpson-Bell, Chima, 2023. "Gold as international reserves: A barbarous relic no more?," Journal of International Economics, Elsevier, vol. 145(C).
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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