In case you thought the idea of a new global reserve currency has dropped off the map since not much has happened in that regard so far, here is new article calling for one. And it examines the idea of using SDR's from the IMF as well. Who can we think of that has predicted we will see this concept coming in the future? (hint: his initials are JR)
The article linked above appeared in late July on the World Economic Forum web site. It was written by Jose Antonio Ocampo. Who is that you ask? Here is some info on him. Mr. Ocampo qualifies as a global insider who would be a strong supporter of global institutions such as the IMF and the World Bank. So his endorsement of the SDR is not a surprise. Here are some quotes from the article:
"Dissatisfaction with the dollar’s role as the dominant global reserve currency is not new. In the 1960s, French Finance Minister Valéry Giscard d’Estaing famously condemned the “exorbitant privilege” that the dollar’s status bestowed upon the United States."
". . . . . The solution, however, lies not in replacing the dollar with the renminbi, but in strengthening the role of the world’s only truly global currency: the IMF’s Special Drawing Rights."
"The private use of SDRs could also be encouraged, though that would likely be met with strong opposition from countries currently issuing international reserve currencies, especially the US. Keeping SDRs as pure “central bank money” would eliminate such opposition, enabling them to complement and stabilize the current system, rather than upend it."
My added comments: As always, readers should read the entire article linked above for full context. The fact that a global insider is promoting the idea of the use of the SDR as a global reserve currency is nothing new or surprising. And it certainly is in line with Jim Rickards prediction that the SDR will be put forward as a solution to the next financial crisis.
What we found new and interesting in this article is the statement in bold underline above, "the private use of SDR's could also be encouraged". Readers here know we have been following the Klickex GSD (Global Stability Dollar) since it was introduced last year in the fall as a new concept. There is a reason we follow this new concept. The SDR at the IMF cannot be used by private banks and citizens as things stand now because it is an internal unit of account at the IMF. It cannot be used as an external currency by private banks or individual citizens.
It is possible that at some point in the future, the Klickex GSD could be implemented in such a way as to connect it as an "outside" currency to the "inside" SDR unit. A currency that could be used by private banks and individuals. This is not something that would happen tomorrow for sure. But it is a possibility in the next few years depending upon how the GSD does in its initial introduction for use by real Central Banks (coming soon). The intent would be to add stability to foreign currency exchange and offer a more stable system backed currency to the public as an alternative to their national currency (which might be much more volatile).
If such a new currency were asset backed and also system backed (like the FDIC backs bank accounts now, but a much stronger backing), people might find it more trustworthy than their own national currency. If this currency was also digital, it could be used to complete actual financial transactions anywhere in the world in just a few minutes time. Another factor that might make it appeal to many people.
The key to success would be that the system backed it and approved it (unlike Bitcoin) and that it met their criteria regarding anti-money laundering (so the banks would be OK with such rapid funds transfers around the globe). No technology like this is being used today that is approved by the banking system. If the Klickex GSD currency had such approval, it would have a substantial advantage over other alternatives.
It is something worth tracking in the future for sure as it could dramatically change the way things work in the monetary system in the future. We will follow it here over time and see how things turn out.