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11. It’s All About the Benjamins: Why Banknotes Look As They Do, and Why You Should Care

Author:
Jacques E.C. Hymans
Publication Date:
03-2023
Content Type:
Journal Article
Journal:
Brown Journal of World Affairs
Institution:
Brown Journal of World Affairs
Abstract:
In his classic treatise The Philosophy of Money, sociologist Georg Simmel asserts that money is “colorless” and “abstract,” a “system of numbers” that relentlessly promotes the rationalization and depersonalization of modern life.1 Simmel might be right about money, but banknotes are a different story. The banknotes of the world contain many colorful images of human beings, animals, landscapes, and other eye-catching features. What are the purposes of banknote iconography? What kinds of images best achieve those purposes? Does the art of the banknote still matter in the digital age? The answers to these questions also speak to broader issues, including the bases of social trust, the content of collective identities, and the power of visual politics. Some people think of physical cash as a relic of the old days of brick-and- mortar retail. It is true that credit and debit cards and digital means of payment are on the rise. Even the Monopoly board game no longer comes with its famous colorful paper money; instead, a voice-activated electronic “banker” processes players’ transactions and keeps track of their balances.2 Yet reports of the death of the banknote are highly exaggerated. Between 1990 and 2020 the value of cash in circulation soared worldwide from about $1 trillion to $7 trillion, and the annual rate of increase has been accelerating over time.3 The coronavirus pandemic that erupted in early 2020 caused a further spike in cash demand all over the world.4 A comprehensive study of 140 currencies found that the value of cash in circulation in 137 of those currencies rose in 2020 over the previous year while it declined in only three.5 The value of U.S. currency in circulation shot up by 16 percent during 2020, double the average increase of the previous 10 years.6 As of the end of June 2023, it stood at $2.3 trillion, or to be more precise, $2,342,265,000,000—almost 10 percent of U.S. GDP.7 In short, banknotes remain greatly in demand almost everywhere; and wherever there are banknotes, there is banknote iconography.
Topic:
Economy, Currency, and Iconography
Political Geography:
Global Focus

12. A Wall of Separation Between Money and State: Policy and Philosophy for the Era of Cryptocurrency

Author:
Max Raskin and Richard A. Epstein
Publication Date:
03-2023
Content Type:
Journal Article
Journal:
Brown Journal of World Affairs
Institution:
Brown Journal of World Affairs
Abstract:
Throughout history, there have been two fundamental and interrelated debates over the creation and use of money.1 The first debate is whether money should be created by the market or the state.2 When money is created by private markets, individual currencies oper- ate in competition with each other, such that the value of any given currency is measured by its relative strength against the others. In contrast, under a system where the government has a monopoly over the supply of money, the sound- ness of the currency is ensured, if at all, by a set of institutional constraints to prevent its debasement. A second debate arises between those who believe that money should be a tool used by policymakers to achieve certain political, economic, and social ends and those who believe that money should be a neutral unit of measurement, like inches or kilograms.3 Today, central banks are tasked with mandates to achieve full employment, plug budget deficits, and spur real economic growth. The institutional challenge for governments is to decide how to balance these goals with the need for price stability. Discretion by central bankers with respect to these tradeoffs is intended to allow public officials to operate the system for the public benefit. By the same token, government discretion in the management of money creates the possibility of major failures—such as runaway inflation—if that discretion is misused.
Topic:
Finance, Economy, Central Bank, Currency, Cryptocurrencies, and Bitcoin
Political Geography:
Global Focus and United States of America

13. The Internationalisation of the Chinese Renminbi and China’s Digital Currency Plans

Author:
Lorenzo Bencivelli and Michele Savini Zangrandi
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
China has made major reforms to boost the international standing of its currency. The global presence of the renminbi remains contained, however. This is due to China’s economic structure (a persistent current account surplus and a partially closed financial account) and the government’s grip on the economy. China is also a Central Bank Digital Currency (CBDC) forerunner. The digital yuan (e-cny) is already active in a large scale trial. Many claim that the e-cny could provide a major boost to the internationalisation of the renminbi. However, the internationalisation of the renminbi would require major economic reforms that cannot be bypassed by the deployment of new technologies. The e-cny is therefore unlikely to boost the renminbi’s international presence. Yet, its underlying technology could be exported to other countries wishing to deploy their own-currency CBDCs. Much like with telecommunication equipment, this scenario would put China in the position of being a provider of a critical infrastructure. In the longer run, the export of e-cny technology might also facilitate the creation alternative payment networks, though this scenario is not very likely.
Topic:
Political Economy, Governance, Finance, Currency, and Digital Policy
Political Geography:
China and Asia

14. Exchange Rate Arrangements: Fix, Float, or Manage?

Author:
Nathaniel Cline, Carlos Schönerwald da Silva, and Matias Vernengo
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
The paper tries to provide a concise summary of the main debates on exchange rate arrangements. It a simple taxonomy of exchange rate arrangements, fixed, flexible and managed, and a brief analysis of the main debates about their advantages and disadvantages. It emphasizes the different policy objectives of mainstream and heterodox schools of thought, suggesting that they tend to be more relevant than the specific defense of one particular exchange rate arrangement. In that sense, there are divergences on their preferences within schools of thought. The paper also discusses the causes of currency crises and the role of the dollar in the international monetary system.
Topic:
Economics, Monetary Policy, Crisis Management, Exchange Rate Policy, and Currency
Political Geography:
Global Focus

15. Digitalization of Payments and Currency

Author:
Robert Fay, Keldon Bester, David Dodge, Serge Dupont, Mark Jewett, John Murray, and Laurie Wright
Publication Date:
06-2023
Content Type:
Special Report
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
As a growing number of countries adopt digital payments and currencies, the Centre for International Governance Innovation and Bennett Jones LLP hosted a virtual workshop on March 7, 2023, to discuss the implications for Canada. Building on their previous work in related fields, participants including Canadian and international experts from the public and private sectors as well as from academia explored four topics: payments system modernization, open banking, stablecoins and central bank digital currencies. Creating a trustworthy digital financial system in which Canadians can conduct personal and business transactions in a reliable way is key to Canada’s successful adoption of digital payments and currencies.
Topic:
Governance, Central Bank, Currency, Innovation, Conference, Digitalization, and Digital Currency
Political Geography:
Global Focus

16. The Twilight of US Dollar Hegemony and the Coming Multipolar World

Author:
Armin Krishnan and Hanna Samir Kassab
Publication Date:
12-2023
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
The hegemony of the dollar is fundamental to the primacy of the United States in the international system, perhaps even more so than US military superiority. The US government can afford to spend several times more on its armed forces than its military competitors because it has the ability to sustain seemingly unlimited levels of debt thanks to the relative strength of the US dollar. Other nations have been willing to buy US debt and hold large reserves of dollars, which has kept the value of the dollar reasonably stable compared to other currencies. The authors argue that there are clear signs that the dollar's hegemony is in decline and that this could lead to a multipolar world in which the United States is just one great power among others. The article will discuss the reasons why the US dollar is so important to US power, why the dollar's attractiveness is declining and how the unprecedented sanctions imposed by Russia in response to the Russian incursion into Ukraine may have inadvertently accelerated the emergence of a multipolar world.
Topic:
Debt, Sanctions, Armed Forces, Currency, Multipolarity, and Russia-Ukraine War
Political Geography:
Global Focus and United States of America

17. Third time lucky? China’s push to internationalise the renminbi

Author:
Alessia Amighini and Alicia Garcia-Herrero
Publication Date:
11-2023
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Western concerns that the renminbi could rival the dollar as an international currency contrast with underwhelming numbers in terms of global settlements in renminbi and with the experience of China’s two main previous failed attempts to achieve renminbi internationalisation. However, China is moving towards a more realistic plan for renminbi internationalisation, focusing on China’s strengths in trade and financing. China is now the main trading partner for a very large number of countries and has become a major creditor for a good part of the Global South. This, together with the increasingly frequent restrictions on the use of the dollar, is strengthening the renminbi. The cross-border use of the renminbi for trade settlements and financing (Chinese banks’ overseas loans denominated in renminbi and official renminbi swap lines offered by the People’s Bank of China) has been on the rise since 2022, coinciding with Russia’s invasion of Ukraine and the related Western sanctions. The increase is notable considering that the renminbi has been depreciating since January 2023 and China’s economic performance has been underwhelming. However, the use of the renminbi as investment currency has declined since 2022, in terms of both the share of foreign-exchange reserves denominated in renminbi and the share of Chinese onshore assets held by foreign investors. The current push is so far proving successful compared to previous attempts, but it remains hard to tell if China will succeed in this renewed attempt to internationalise its currency through use of its heavy weight among trading nations. Obvious constraints remain that could hold back full internationalisation of the renminbi, especially the absence of full capital account convertibility. Nevertheless, China’s somewhat heterodox approach to internationalising its currency could succeed given the ongoing placing of restrictions on use of the dollar. How the dollar, the euro or the international monetary system may be further affected by the rise of the renminbi is a major policy question that must be explored further.
Topic:
Finance, Currency, Trade, and Internationalization
Political Geography:
China and Asia

18. A Potential Path for Alleviating Currency Risk in Emerging Market Green Bonds

Author:
Gautam Jain
Publication Date:
09-2023
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
A large gap exists between the financing needed for the energy transition and what is being invested. Green bonds are flourishing as one of the main sources to close this financing gap, with over $2.5 trillion issued globally thus far. However, emerging market and developing economies (EMDEs) haven’t fully capitalized on the growth of this asset class: the share of EMDE (excluding China) green bonds denominated in local currencies within the total green bond universe remains minuscule. While some EMDE issuers can sell a bond denominated in dollars and hedge by swapping the dollar exposure into the local currency of the underlying projects, the cost of doing so is usually prohibitive. This report, part of the Financing the Energy Transition initiative at the Center on Global Energy Policy at Columbia University SIPA, adds to ongoing discussions of how to encourage a greater flow of green financing from international investors to emerging economies. Toward that end, it explores a blended finance structure wherein an intermediary takes on the local currency risk of an EMDE green bond, effectively converting it to a dollar bond that settles internationally, to potentially stimulate more issuances and expand the pool of international investors with access to these bonds.
Topic:
Climate Finance, Currency, Bonds, and Energy Transition
Political Geography:
Global Focus

19. The Impact on Early Bhutanese Coinage of Contentious Relations Between Bhutan and Cooch Behar from 1772 to 1774

Author:
Michael Givel
Publication Date:
03-2022
Content Type:
Journal Article
Journal:
Journal of Bhutan Studies
Institution:
Centre for Bhutan & GNH Studies (CBS)
Abstract:
Bhutan’s coinage has been thoroughly documented related to design and mintage variability. In addition, as noted for the first time in this paper, one of Bhutan’s late 18th to early 20th century core governmental missions is reflected through changes in Bhutan’s coinage. This is based on Bhutan’s conflict with Cooch Behar including interactions with the British East India Company and the legacy and aftermath of that conflict. While 18th to early 19th century versions of the symbols on Bhutanese coins reflected Hindu and national icons of Cooch Behar, the later versions to 1910 contained Cooch Behar symbols and definitive Buddhist symbols reflecting the sovereignty and a core mission to promote a Bhutanese Buddhist state where citizens became Enlightened.
Topic:
Sovereignty, History, Currency, Buddhism, and British East India Company
Political Geography:
South Asia, Bhutan, and Cooch Behar

20. Covid Döneminde Finansal Varlıklar Arasındaki Nedensellik Farklılaşması (Causality Differentiation Between Financial Assets During COVID Era)

Author:
Üyesi Hidayet Güneş
Publication Date:
07-2022
Content Type:
Journal Article
Journal:
AURUM Journal of Social Sciences
Institution:
Altinbas University
Abstract:
Covid pandemisi her alanda olduğu gibi ekonomik düzende de eski düzenden farklılıkları içerisinde barındırmaktadır. Bundan dolayı yatırımcılar, finansal varlık seçiminde daha dikkatli ve seçici davranmak durumundadırlar. Yeni koşullara uyum sağlayan yatırımcıların getirilerini artırabilme uyum sağlayamayanların ise zorluklarla karşılaşabileceği bir dönem içerisinde bulunulmaktadır. Bu yüzden çalışma, Türkiye’deki çeşitli finansal varlıklar arasındaki nedensellik ilişkisinin Covid döneminde farklılaşıp farklılaşmadığını belirleyebilmek için yapılmıştır. 29 Ocak 2018-10 Mart 2020 tarihleri arası Covid öncesi, 11 Mart 2020-22 Nisan 2022 tarihleri arası Covid dönemi olarak belirlenmiştir. Değişkenler arasındaki nedensellik ilişkisi Toda-Yamamoto testi ile araştırılmıştır. Covid öncesi dönemde gösterge faiz oranının diğer tüm değişkenlerin nedeni olarak belirlenirken Covid döneminde bu durumun ortadan kalktığı tespit edilmiştir. Covid döneminde CDS primi ve Euro/TL kuru değişkenlerinin gösterge faiz oranının nedeni olduğu sonucuna ulaşılmıştır. Ayrıca Covid döneminde döviz kurlarının çift yönlü nedensellik ilişkisi içerisine girdikleri belirlenmiştir. Son olarak Dolar/TL kurundan CDS primine doğru tek yönlü nedensellik ilişkisinin hem Covid öncesi hem de Covid dönemlerinde aynı kaldığı tespit edilmiştir. Türkiye’deki finansal piyasa ve varlıklar arasındaki nedensellik ilişkisi üzerinde Covid pandemisinin etkisinin olduğu sonucu ortaya çıkmaktadır. Bundan dolayı piyasa oyuncularının fonlarını yönetirken, ortaya çıkan yeni durumları göz önünde bulundurarak yatırımlarını gerçekleştirmeleri kendi fon getirileri açısından önem arz etmektedir.
Topic:
Economy, Currency, COVID-19, and Financial Assets
Political Geography:
Turkey and Global Focus