Cryptocurrencies have taken the world by storm. But these decentralized and unregulated digital fiat currencies have more in common with the currencies of ages past than many believe. These commonalities may result in the incorporation of new cryptocurrencies into older institutions. One such institution is the International Monetary Fund's Special Drawing Rights (SDRs), which has bene relegated to an afterthought in the international monetary system since the Nixon Shock in 1971. The Fund's Managing Director recently made comments that indicated that the Fund is exploring the incorporation of a cryptocurrency into the framework of the SDR, a change which China and other emerging economies are bound to encourage because it would likely move the international monetary system away from the use of the powerful U.S. dollar as a reserve currency. Because the U.S. dollar remains the most important currency within the international monetary system, this Article first explores the legal status of U.S. currency and the creation of Bretton Woods after World War II and its implosion after the Nixon Shock. It then discusses the basic functions of SDRs and their past uses. Finally, this Article explores two options that the Fund may have in incorporating cryptocurrencies into SDRs: (1) redefining the SDR as its own unique cryptocurrency; and (2) incorporating a specific cryptocurrency within the SDR's basket of currencies.
Alexander M. Heideman,
Can “IMFcoin” be Scaruffi's Moneta Immaginaria?,
23 Marq. Intellectual Property L. Rev. 137
Available at: https://scholarship.law.marquette.edu/iplr/vol23/iss2/5