Reserve Currencies, Problems and Prospects of Their Development in the Conditions of Globalization and Integration of Banking Systems

Abstract

The work is devoted to the issues of reserve currency development and their future prospects in the context of globalization and integration of the banking system. The theoretical foundations of the international reserve currency system are considered, which play a vital role in maintaining financial stability and facilitating international trade and investment. The problems faced by the modern international reserve currency system in the context of global financial crises are summarized. The characteristics of the current international reserve currency system and the problems it faces are analyzed. The risks associated with a system dominated by a single currency, such as exchange rate fluctuations, monetary policy spillovers, and global financial stability problems, are summarized. Particular attention is paid to sharp fluctuations in exchange rates, which not only affect international trade and investment, but can also trigger financial crises, and the Trifin model is proposed, which aims to explore how to balance the supply and demand of reserve currencies in a diversified reserve currency system to achieve global financial stability. A multipolar model of the future reserve currency system is designed, which envisages the gradual increase in the status of the renminbi and other emerging market currencies in international reserves, injecting new vitality and diversity into the global reserve currency system.