Up to now, the US dollar has been the world’s reserve currency. Most things are quoted in terms of US dollars. The US currency has ascended to that position because of the size of the economy behind it. However prolifigat spending by the US government and a population mired in too much debt, is starting to cause a re-thinking of this standard. The Chinese for example are taking baby steps already to circumvent the US dollar in its transactions. It has already struck up contracts in its own currency and the Brazilian currency. Here’s another instance from Reuters:
“The World Bank issued its first yuan-denominated bond, raising $76 million and trying to promote the use of the Chinese currency in international markets at a time when China’s stake in the institution is about to increase. The World Bank’s 500 million yuan bond issue arrived when China’s shareholding in the World Bank is about to increase, potentially making China the third-largest stakeholder in the lender after the United States and Japan.”
