For decades, the US dollar has served as the world’s primary reserve currency. However, the dollar was not always in the premier spot amongst the world’s currencies, surpassing the pound sterling in the twentieth century. With today’s changing economic environment and shifting global sentiment, other currencies are also gaining influence in the reserve currency arena. With that in mind, what countries are making moves and what other options might there be?
The Yuan
The world’s second largest global economy, China, has been rapidly gaining in economic power since the 1980s, growing at an average annual rate of almost ten percent. The country’s currency, the yuan, rose from the thirteenth-most-used currency in 2012 to the fifth most prolific currency in just three years, surpassing the Swiss franc, Canadian loonie, and Australian dollar. Due to the yuan’s increased use in international trade and subsequent increased influence, in 2016 the International Monetary Fund awarded the yuan reserve currency status. In order to service the yuan’s increased usage and encourage the use of the yuan in trade, China has set up trading hubs for the renminbi…
