Title: A descriptive analysis of the variables that determine a currency's potential status as a reserve currency

Authors: Antonia Trikounaki; Georgios Atsalakis

Addresses: School of Production Engineering and Management, Technical University of Crete, Chania, Crete, Greece ' School of Production Engineering and Management, Technical University of Crete, Chania, Crete, Greece

Abstract: This paper presents a descriptive analysis of the variables that determine a currency's potential status as a reserve currency. Specifically, the paper highlights the reserve currencies' characteristics, the variables that contribute to making a currency a reserve currency, the ways these variables are measured, the methodologies used to assess whether a currency has a chance of becoming a reserve one, and how recent technologies affect reserve currencies' variables. Despite the existence of a plethora of scientific articles on reserve currencies, none of them has gathered all the criteria that define a currency, as a reserve currency. This paper aims to fill this gap in the literature. Searches of academic sources in search engines and scientific research databases identified 28 variables that influence a currency's projected status as a reserve currency. These findings were derived mainly via periodic qualitative and quantitative research and are all presented in this paper.

Keywords: reserve currency; reserve status; dollar; euro; convertibility; currency market; foreign exchange; digital currency.

DOI: 10.1504/IJFERM.2024.142846

International Journal of Financial Engineering and Risk Management, 2024 Vol.3 No.4, pp.379 - 406

Received: 02 Dec 2023
Accepted: 16 Aug 2024
Published online: 28 Nov 2024 *

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