A Fear-Free Analysis
By JC Collins
Back in 2011 the World Bank published a report titled Global Development Horizons – Multipolarity: The New Global Economy (GDH2011). In that report it laid out three potential scenarios for the future framework of the international monetary system. These three scenarios were:
Status quo of the USD based framework.
A multicurrency system which better reflects the realities of the emerging economies.
An SDR based reserve system.
It was decided that scenario two, a multicurrency system, would offer the best opportunity to rebalance the international monetary system and contribute to global growth. Under this option the USD could remain at the head of a multicurrency system for a longer period of time. This would make such a transitioning multicurrency system stable as wealth incrementally shifts from the developed economies to the developing, or emerging, economies.