The World's Key Reserve Currency: Challenges and Threats - BRICS Is Close to Create Its Own Currency

Анотація

<i>The object</i> <i>of the research</i> is to deepen the scientific understanding of reserve currencies in a historical and modern context. This study examines the evolution of the global reserve currency system, with a particular focus on the dominance of the U.S. dollar and the growing roles of the euro, Chinese yuan, Japanese yen, and British pound over the past two decades. <i>The investigated problem</i> lies in the transformation of the essence and function of reserve currencies over the last 25 years, driven by structural shifts in the global economy, financial markets, and geopolitical dynamics. Previously unresolved aspects of this broader issue include the increasing challenges to the U.S. dollar's status as the sole global anchor currency, especially from emerging powers such as BRICS. <i>The analysis of recent research and publications</i> highlights a wide range of scholarly and institutional perspectives, including works by Bertaut, Gopinath, Eichengreen, Rogoff, Bracke, and Bunda, along with research conducted by the IMF, Federal Reserve, World Bank, ECB, and BIS. These sources provide the basis for a deeper examination of monetary anchoring and global exchange rate behavior. <i>The main scientific results include</i> an updated application of the Frankel and Wei (2008) methodology to assess currency anchoring patterns in 149 emerging and developing countries during 2010–2024. The study also presents forecasts based on purchasing power parity, indicating the increasing economic weight of BRICS in global GDP. The area of practical application involves policy planning by governments that continue to rely on the U.S. dollar as an anchor currency. Innovative technological approaches identified include enhanced prudential oversight by central banks and the development of adaptive exchange rate policies in response to growing financial risks. <i>The scope of these innovations</i> also includes strategies to redirect European savings into high-tech sectors that stimulate sustainable growth and reduce systemic dependence on the dollar. This research contributes to the global discourse on the transition toward a more multipolar reserve currency system and offers insights into how monetary sovereignty and stability can be maintained in a changing world economy.

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