A New Monetary Order by Creating a New Global Reserve Currency

The US dollar has been at the centre of the international financial system for nearly a century, being the reference currency for global trade, the pricing of commodities and monetary policy coordination. Despite the growing pressure on US debt sustainability and current Administration positions, which have made the dollar less attractive, no credible alternative to the dollar has yet emerged. To help improve financial stability even with a reduced role of the US dollar, an approach could be built on a tried-and-tested approach of a pooled, managed currency. This approach was used in the original Bretton Woods agreement of 1944 with its soft peg to the US dollar (until 1971) and then re-utilised by the European system with a soft peg to the German Mark from 1973 until the establishment of the euro in 1999.