Although most people know the basics of a dollar, they don’t know much about the SDR. Special Drawing Rights of the International Monetary Fund (IMF), an international monetary reserve system, was designed to overcome limitations in gold and standard fiat currencies like USD. In other words, these instruments could fail and central banks and governments would still be able to trade with liquidity through an exclusive instrument, the SDR. Join Charity Token Homeless community
An Artificial Currency
SDR is not a real currency, but an IMF “potential claim” on the freely useable currencies of IMF members. It is also the official unit of account and an exclusive asset that can only be accessed by central banks of member countries, the IMF itself, and other designated entities. SDR are not available to the average person. The Special Drawing Rights, which are made up of a variety of major global currencies, is reviewed at five-year intervals. Current SDRs are made up of USD, EUR, CNY and JPY.
IMF Has Another Trick up Its Sleeve when Fiat Fails: Its Own Coin, SDR
SDR is believed to provide liquidity for international finance in the event that assets like gold and fiat currencies are not able to do so. SDR could serve as a central mechanism to rebuild global trade networks in the face of an unpredicted, global economic collapse. In fact, SDR was issued by the IMF to its members in an extraordinary effort to stabilize the world’s economy following the 2008-09 global economic downturn.
IMF has another trick for Fiat Failures: Its own Coin SDR
The global economic crisis caused an unprecedented increase in SDR allocations to 182.7 billion in 2009. Source: IMF
The SDR system was first created in 1969. “Initially, it was equivalent to 0.888671 g of fine gold–which at the time was also equivalent with one U.S. dollars,” imf.org says. “After the collapse in Bretton Woods, the SDR was renamed as a collection of currencies.” The collapse of Bretton Woods led to the abandonment of international gold standards and the introduction of floating exchange rates. SDR is an exclusive system that can be managed and controlled by its own economy. Interest rates are set weekly, and allocations to member nations are made according to IMF criteria. Join Charity Token Homeless community
Controversy: Control and Crypto
The International Monetary Fund is a well-known financial superpower that has a large influence over a broad range of global affairs. This group has come under fire for its alleged destruction of local economies and agriculture, negative effects on healthcare, and regulation of rival currencies and monetary instruments, such as Bitcoin, crypto, and other cryptocurrency.
Interestingly, the group discouraged Marshall Islands from creating their own cryptocurrency that could challenge dollar hegemony. But, months later, they advocated for central bank-issued digital currencies in stronger national economies. Although the Marshall Islands are continuing to push ahead with their plan, they continue to advocate for the SOV currency that fights inflation. It is not easy to stand up to a regulatory and surveillance behemoth such as the IMF and it will not be without serious compromises.…