| In the section | Articles |
| Title of the article | Prospects for Creating a Reserve Currency by the Shanghai Cooperation Organization Countries |
| Pages | 128-153 |
| Author | Igor Sergeevich Ivanchenko Professor at Department of Statistics, Econometrics and Risk Assessment, Faculty of Accounting and Economics Rostov State University of Economics 69 Bolshaya Sadovaya St., Rostov-on-Don, 344002, Russian Federation This email address is being protected from spambots. You need JavaScript enabled to view it. ORCID: 0000-0002-9268-2103 |
| Abstract | The purpose of this study is to clarify the prospects for the creation of a new reserve currency by the (Shanghai Cooperation Organization (SCO) countries to reduce foreign exchange costs in trade transactions, to strengthen integration processes in the Eurasian space, to increase the investment potential of developing Asian countries and to stimulate sustainable economic growth. The paper presents the results of mathematical modeling of the optimal portfolio structure of collateral assets with the possible issuance of a new reserve currency by the SCO countries. The article concludes that currently the best reserve assets that have been analyzed are the Chinese yuan, Indian rupee and gold. The expected return of the new reserve currency does not depend on fluctuations in the global foreign exchange market, and its calculated risk (standard deviation of return) turned out to be lower than the risk of fluctuations in the value of the yuan and gold. The article concludes that gold is the best collateral asset, as it has a stable positive yield, constant purchasing power and a fair value that is 4 times higher than the market value. It is proposed to issue a new reserve currency in the form of stablecoins so that it incorporates all the best properties of cryptocurrencies and fiat money |
| Code | 336.744 |
| JEL | C51, E47, E51 |
| DOI | https://dx.doi.org/10.14530/se.2024.3.128-153 |
| Keywords | Economic development, gold standard, Markowitz model, non-inflationary issue, fair value, Shanghai Cooperative Organization (SCO) |
| Download | |
| For citation | Ivanchenko I.S. Prospects for Creating a Reserve Currency by the Shanghai Cooperation Organization Countries. Prostranstvennaya Ekonomika = Spatial Economics, 2024, vol. 20, no. 3, pp. 128–153. https://dx.doi.org/10.14530/se.2024.3.128-153 (In Russian) |
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| Financing | The study was supported by Russian Science Foundation under scientific project No. 2328-00931, https://rscf.ru/project/23-28-00931/, ‘Inflation-free economic growth of the Russian economy: opportunities and ways to achieve in the conditions of sanctions’ |
| Submitted | 09.03.2024 |
| Approved after reviewing | 18.08.2024 |
| Accepted for publication | 25.08.2024 |
| Available online | 04.10.2024 |