Special Drawing Rights (SDRs) failed to deliver global liquidity post-Bretton Woods; a crypto-revamp could revive the SDR and help support climate goals.
After the 2009 Global Financial Crisis the Governor of the Peoples Bank of China, Zhou Xiaochuan, announced, “The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies”.
He proposed SDRs, and Nobelists C. Fred Bergsten, Robert Mundell, and Joseph Stieglitz agreed, “The creation of a global currency would restore a needed coherence to the international monetary system, give the IMF a function that would help it to promote stability and be a catalyst for international harmony”.
Beijing began valuing its yuan against a currency basket in 2012 and the IMF made its first SDR loan in 2014. The World Bank issued the first SDR bonds in 2016, Standard Chartered Bank issued the first commercial SDR notes in 2017, and the world’s central banks began stating their currency reserves in SDRs in 2019.