Editing Special drawing rights (section)

===Alternative to U.S. dollar===
The XDR comes to prominence when the U.S. dollar is weak or otherwise unsuitable to be a foreign exchange reserve asset. This usually manifests itself as an allocation of XDRs to IMF member countries. Distrust of the U.S. dollar is not the only stated reason allocations have been made, however. One of its first roles was to alleviate an expected shortfall of U.S. dollars {{circa|1970}}.<ref  name=white2/> At this time, the United States had a conservative monetary policy<ref  name=white2/> and did not want to increase the total amount of U.S. dollars in existence.{{citation needed|date=June 2011}} If the United States had continued down this path, the dollar would have become a less attractive foreign exchange reserve asset: it would not have had the necessary [[Market liquidity|liquidity]] to serve this function. Soon after XDR allocations began, the United States reversed its former policy and provided sufficient liquidity.<ref  name=white2/> In the process a potential role for the XDR was removed. During this first round of allocations, 9.3 billion XDRs were distributed to IMF member countries.

The XDR resurfaced in 1978 when many countries were wary of taking on more foreign exchange reserve assets denominated in U.S. dollars. This suspicion of the dollar precipitated an allocation of 12 billion XDRs over a period of four years.<ref  name=white3/>

Concomitant with the [[2008 financial crisis]], the third round of XDR allocations occurred in the years 2009<ref name=factsheet/> and 2011.<ref name=20billion/> The IMF recognized the financial crisis as the cause for distributing the large majority of these third-round allotments, but some allocations were couched as distributing XDRs to countries that had never received any<ref name=factsheet/> and others as a re-balancing of IMF quotas, which determine how many XDRs a country is allotted, to better represent the economic strength of [[emerging markets]].<ref name=20billion/>

During this time China, a country with large holdings of U.S. dollar foreign exchange reserves,<ref>{{Cite web
|url=http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html |archive-url=https://ghostarchive.org/archive/20221210/http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html |archive-date=2022-12-10 |url-access=subscription
|website=Financial Times
|title=China calls for new reserve currency
|date=March 23, 2009
|author=Jamil Anderlini
}}</ref> voiced its displeasure at the current international monetary system, and promoted measures that would allow the XDR to "fully satisfy the member countries' demand for a reserve currency."<ref>{{Cite web
|url=http://www.pbc.gov.cn/publish/english/956/2009/20091229104425550619706/20091229104425550619706_.html
|archive-url=https://web.archive.org/web/20100922100938/http://www.pbc.gov.cn/publish/english/956/2009/20091229104425550619706/20091229104425550619706_.html
|archive-date=September 22, 2010
|website=People's Bank of China
|title=Reform the International Monetary System
|date=March 23, 2009
|author=Zhou Xiaochuan
}} [http://www.bis.org/review/r090402c.pdf Alt URL]</ref> These comments, made by a chairman of the People's Bank of China, [[Zhou Xiaochuan]], drew media attention,<ref>{{Cite web
|url=https://www.reuters.com/article/wtUSInvestingNews/idUSLJ93633020090319 |title=China backs talks on dollar as reserve
|website=Reuters
|date=March 19, 2009
}}
*{{Cite news
|url=http://www.economist.com/finance/displayStory.cfm?story_id=13382566&source=features_box2
|title=China questions the dollar's role as a reserve currency
|date=March 26, 2009
|newspaper=The Economist
}}</ref> and the IMF showed some support for China's stance. It produced a paper exploring ways the substance and function of the XDR could be increased.<ref  name=p1/> China has also suggested the creation of a substitution account to allow exchange of U.S. dollars into XDRs.<ref  name=white1/> When substitution was proposed before, in 1978, the United States appeared reluctant to allow such a mechanism to become operational.<ref name="white3" />