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Unpublished Paper
Implementing a Real SDR Currency Board
Reinventing Bretton Woods Committee and China Society for Finance and Banking (2014)
  • Warren Coats
The enormous utility of money is a function of how widely it can be used for pricing and paying for the things we buy and sell and how stable or at least predictable is its value over time. The United States dollar became and remains the world’s common currency for global trade because of the relative size of the American economy, the relative stability of the purchasing power of the dollar, and the extensive development and liquidity of dollar financial instruments. Its use is now well entrenched. As pointed out by Richard Cooper: “It would take both a major shock to the dollar and a viable alternative to dislodge it from widespread use.”
Concern with reliance on the dollar and its potential future weakness continues to grow. Though the Second Amendment to the IMF’s Articles of Agreement committed its members to make SDRs “the principal reserve asset in the international monetary system” (IMF Article XXII), the commitment was never seriously implemented.
Twenty years ago, I proposed amending the IMF’s poorly named Special Drawing Rights (SDRs) in two important ways that I thought and still think would transform their attractiveness and thus countries’ willingness to hold and use them. This article reviews these proposals and explore the issues that would need to be addressed to implement them.
In July 2015 several paragraphs were added introducing term (interest paying) SDRs
  • SDR,
  • International Monetary System,
  • IMF,
  • Gold,
  • Currency Board,
  • valuation basket
Publication Date
Spring 2014
Citation Information
Warren Coats. "Implementing a Real SDR Currency Board" Reinventing Bretton Woods Committee and China Society for Finance and Banking. Hangzhou, China; May 17, 2014; Astana, Kazakhstan; May 21, 2014; Siena, Italy. July 5, 2014. Available at: