Publication

This paper analyzes the consequences of the internationalization of the renminbi (RMB) for the global monetary system and its possible ascension to reserve currency status. The author argues that the results of internationalization would be benign, both for China and the rest of the world. The emergence of the RMB as a potential reserve currency would expand and diversify the supply of reserve assets, allowing central banks to maintain buffers against financial shocks but to not force the United States to issue the bulk of liquid claims and bear the burden of an ever-expanding debt to the rest of the world.