alt Hacker NewsMajor question is then, what currency should be reserve?
Euro? - Nowhere near as stable as the dollar, and some quite shaky fundamentals and history? Yen? Pound? Swiss Franc?
I suspect Yuan will be unpalatable.
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The new reserve currency won't be a single country's currency but a basket of currencies, where the ratio contribution of component currencies gets adjusted every once in a while.
BRICS has been proposing a sort of basket mechanism. Bitcoin is not yet thickly enough capitalized. The historical standard was gold for 3000 years, and that's what backed the dollar until that was "temporarily suspended" in 01971. That's the default.
The Chinese yuan is not a viable reserve currency. Why? Because it's pegged to a basket of other currencies. It should really inflate in value but Chinese government policy is to undervalue it to aid exports. Exports are ~20% of China's economy. It would devastate the economy if the yuan was allowed to freely float, or at least float with the level of central bank management that other developed nations' fiat currencies have.
China has repeatedly tried to activate a consumption economy (like the US) but the Chinese just save and buy real estate, in part because there is no retirement benefits so they have to self-fund that.
So what currency? Currently, there is no viable alternative to the US dollar. It is backed by the largest economy in the world AND the US military.
You might find people who talk about BRICS like it's a real thing. It is not. It's just a group of randomly selected countries meant to sound nice (literally, South Africa is only there for the S sound) with no unified policy or currency.
It's not the euro either. Europe ultimately is still dependent on US defence and beholden to US foreign policy.
IMF does have Speecial Drawing Rights that kind of, but not really, acts as a global currency
Bitcoin would be the most fair choice for a new reserve currency. It has equivalent properties as gold but is more practical to use, and there's no geographic inequality to mining it.
No government could benefit from manipulating it. How cool is that ?
The Euro is already a reserve currency and makes up about 20% of worldwide reserves. Which is of course not as much as the dollar which is about 60%, but these numbers could of course shift.