Editing Reserve currency (section)

==History==
Reserve currencies have come and gone with the evolution of the world’s geopolitical order. International currencies in the past have (in addition to those discussed below) included the [[Ancient drachma|Greek drachma]], coined in the fifth century BC, the Roman [[denarius]], the Byzantine [[Solidus (coin)|solidus]], the Islamic [[Gold dinar|dinar]] of the Middle Ages, and the [[French franc]].

The Venetian [[ducat]] and the Florentine [[florin]] was the gold-based currency of choice between Europe and the Arab world from the 13th to the 16th centuries, since gold was easier than silver to mint in standard sizes and transport over long distances. It was the [[Spanish dollar|Spanish silver dollar]], however, which created the first true global reserve currency recognized in Europe, Asia and the Americas from the 16th to the 19th centuries due to abundant silver supplies from [[Spanish America]].<ref>{{Cite web|url=https://nationalinterest.org/feature/the-silver-way-explains-how-the-old-mexican-dollar-changed-20410|title = 'The Silver Way' Explains How the Old Mexican Dollar Changed the World|date = 30 April 2017}}</ref>

While the [[Dutch guilder#History|Dutch guilder]] was a reserve currency of somewhat lesser scope, used between Europe and the territories of the [[Dutch colonial empire]] from the 17th to 18th centuries, it was also a [[silver standard]] currency fed with the output of Spanish-American mines flowing through the [[Spanish Netherlands]]. The Dutch, through the ''Amsterdam Wisselbank'' (the [[Bank of Amsterdam]]), were also the first to establish a reserve currency whose monetary unit was stabilized using practices familiar to modern [[central banking]] (as opposed to the [[Spanish dollar]] stabilized through American mine output and Spanish fiat) and which can be considered as the precursor to modern-day [[monetary policy]].<ref>{{Cite web|title=The Big Problem of Large Bills: The Bank of Amsterdam and the Origins of Central Banking |first1=Stephen |last1=Quinn |first2=William |last2=Roberds |publisher=Federal Reserve Bank of Atlanta, Working Paper 2005-16|date=2005 |location=United States of America |url=https://www.frbatlanta.org/-/media/Documents/research/publications/wp/2005/wp0516.pdf?la=en }}</ref><ref name="The Euro at Ten">{{cite book|title=The Euro at Ten: The Next Global Currency |first1=Jean |last1=Pisani-Ferry |first2=Adam S. |last2=Posen |publisher=Peter G. Peterson Institute for International Economies & Brueggel|date=2009 |location=United States of America |url=https://books.google.com/books?id=MkPgWhcYCg8C|isbn=9780881325584 }}</ref>

It was therefore the Dutch which served as the model for [[bank money]] and reserve currencies stabilized by central banks, with the establishment of [[Bank of England]] in 1694 and the [[Bank of France]] in the 18th century. The British [[pound sterling]], in particular, was poised to dislodge the Spanish dollar's hegemony as the rest of the world transitioned to the [[gold standard]] in the last quarter of the 19th century. At that point, the UK was the primary exporter of manufactured goods and services, and over 60% of world trade was invoiced in pounds sterling. British banks were also expanding overseas; London was the world centre for [[insurance]] and [[commodity market]]s and British capital was the leading source of foreign investment around the world; sterling soon became the standard currency used for international commercial transactions.<ref>[https://www.telegraph.co.uk/news/1399693/A-history-of-sterling.html "A history of sterling"] by Kit Dawnay, ''[[The Daily Telegraph|The Telegraph]]'', 8 October 2001</ref> On continental Europe, the bimetallic standard of the [[French franc]] remained the unifying currency of several European countries and their colonies under the [[Latin Monetary Union]], which was established in 1865. Peru, Colombia and Venezuela also adopted the system in the 1860s and 1870s.<ref>{{cite book |first=Henry Parker |last=Willis |author-link=Henry Parker Willis |title=A History of the Latin Monetary Union: A Study in International Monetary Action |place=Chicago |publisher=University of Chicago Press |year=1901 |page=84}}</ref>

<gallery>
File:Fiorino_1347.jpg|Florentine florin, 1347
File:Philip_V_Coin_silver,_8_Reales_Mexico.jpg|Spanish [[piece of eight]] of Philip V, 1739
File:Utrecht_Ducaton_82001327.jpg|Silver [[ducaton]] worth 3-3.15 [[Dutch guilder]]s, 1793
File:Sovereign_Victoria_1842_662015.jpg|Sovereign (£1 coin) of Queen Victoria, 1842
File:NNC-US-1907-G$20-Saint_Gaudens_(Roman,_high_relief).jpg|US [[double eagle]] ($20 gold coin), 1907
</gallery>

Attempts were made in the [[interwar period]] to restore the gold standard. The British [[Gold Standard Act 1925|Gold Standard Act]] reintroduced the gold bullion standard in 1925,<ref name=winnie>[http://www.winstonchurchill.org/learn/speeches/speeches-of-winston-churchill/115-gold-standard-bill Text of the Gold Standard Bill speech] {{webarchive|url=https://web.archive.org/web/20091002010318/http://www.winstonchurchill.org/learn/speeches/speeches-of-winston-churchill/115-gold-standard-bill |date=2 October 2009 }} by [[Winston Churchill]], [[House of Commons of the United Kingdom|House of Commons]], 4 May 1925</ref> followed by many other countries. This led to relative stability, followed by [[deflation]], but because of the onset of the [[Great Depression]] and other factors, global trade greatly declined and the gold standard fell. [[Speculative attack]]s on the pound forced Britain entirely off the gold standard in 1931.<ref>[http://www.winstonchurchill.org/learn/speeches/speeches-of-winston-churchill/115-gold-standard-bill Text of speech by Chancellor of the Exchequer] {{webarchive|url=https://web.archive.org/web/20091002010318/http://www.winstonchurchill.org/learn/speeches/speeches-of-winston-churchill/115-gold-standard-bill|date=2 October 2009}} [[Philip Snowden, first Viscount Snowden|Philip Snowden]] to the [[House of Commons of the United Kingdom|House of Commons]], 21 September 1931</ref><ref>{{cite book|first=Barry J. |last=Eichengreen|title=Globalizing Capital: A History of the International Monetary System|url={{google books |id=_iNqESd-9R0C|p=61-|plainurl=yes}}|access-date=23 November 2010|date=15 September 2008|publisher=Princeton University Press|isbn=978-0-691-13937-1|pages=61–}}</ref>

[[File:WhiteandKeynes.jpg|thumb|right|upright|[[John Maynard Keynes]] (right) and [[Harry Dexter White]] helped to draft the provisions of the post-war financial system. Here, they meet at the inaugural meeting of the [[International Monetary Fund]], 1946.]]
After [[World War II]], the international financial system was governed by a formal agreement, the [[Bretton Woods system]]. Under this system, the [[United States dollar]] (USD) was placed deliberately as the anchor of the system, with the US government guaranteeing other central banks that they could sell their US dollar reserves at a fixed rate for gold.<ref>[http://www.treasury.gov/resource-center/international/exchange-rate-policies/Documents/Appendix%201%20Final%20October%2015%202009.pdf An Historical Perspective on the Reserve Currency Status of the U.S. Dollar] treasury.gov</ref>

In the late 1960s and early 1970s, the system suffered setbacks ostensibly due to problems pointed out by the [[Triffin dilemma]]—the conflict of economic interests that arises between short-term domestic objectives and long-term international objectives when a national currency also serves as a world reserve currency.<ref>{{cite web | url=https://www.moneymetals.com/news/2025/04/09/golds-historic-race-to-reclaim-its-role-as-the-preeminent-reserve-currency-003969 | title=WATCH: Gold's Historic Race to Reclaim Role as Preeminent Reserve Currency }}</ref>

Additionally, in 1971 [[President of the United States|President]] [[Richard Nixon]] [[Nixon shock|suspended the convertibility of the USD to gold]], thus creating a fully [[Fiat money|fiat]] global reserve currency system. However, gold has persisted as a significant reserve asset since the collapse of the classical gold standard.<ref>{{Cite journal|last1=Jabko|first1=Nicolas|last2=Schmidt|first2=Sebastian|date=2022|title=The Long Twilight of Gold: How a Pivotal Practice Persisted in the Assemblage of Money|url=https://www.cambridge.org/core/journals/international-organization/article/abs/long-twilight-of-gold-how-a-pivotal-practice-persisted-in-the-assemblage-of-money/4D6FD92E9BAB8192D207E2A5CBFD87E6|journal=International Organization|volume=76 |issue=3 |pages=625–655|language=en|doi=10.1017/S0020818321000461|s2cid=245413975|issn=0020-8183}}</ref>

Following the [[2020 Economic Recession|2020 economic recession]], the [[International Monetary Fund|IMF]] opined about the emergence of "A New Bretton Woods Moment" which could imply the need for a new global reserve currency system. (see below: [[#Calls for an alternative reserve currency|§ Calls for an alternative reserve currency]])<ref>{{Cite web|last1=Georgieva|first1=Kristalina|last2=Washington|first2=IMF Managing Director|last3=DC|title=A New Bretton Woods Moment|url=https://www.imf.org/en/News/Articles/2020/10/15/sp101520-a-new-bretton-woods-moment|access-date=19 January 2021|website=IMF|language=en}}</ref>