The History of International Monetary Authority and the Possibility of a “Third World Currency Zone”

　　Abstract:Through a review and analysis of the history of international currencies, this paper identifies historical trends with respect to changes in international monetary authority. On the basis of these trends and consideration of current developments, it concludes that the Renminbi (RMB) has reached a level of regional consolidation such that it can become an international currency. It finds that outside of Asia, countries in Africa and Latin America have very close trade and investment relations with China, and that some are even asymmetrically reliant on China. This provides both a material and an institutional basis for promoting the internationalization of the RMB. The paper argues that a RMB currency zone should ultimately extend beyond the Asia region, maintaining “Asian characteristics” while being more international in scope. In closing, it proposes and explicates a potential roadmap for realizing a “Third World Currency Zone” based around the RMB.

　　Author: Feng Weijiang is an assistant research professor in the Institute of Asia Pacific Studies of the Chinese Academy of Social Sciences