Currency Statecraft: Monetary Rivalry and Geopolitical Ambition

National currencies are used for international commerce, settle foreign trade transactions, and store value for investors and central banks. Countries with currencies that gain international appeal choose to use this status to form their strategy of currency statecraft. Benjamin J. Cohen argues that the primary motivation for currency statecraft is the extent of a country's geopolitical ambition, or how driven it is to build or sustain a prominent place in the international community. The major example of monetary rivalry is the emerging confrontation between the US dollar and the Chinese renminbi, which could play a major role in shaping the broader geopolitical engagement between the two superpowers.

Format: Hardback
Length: 208 pages
Publication date: 15 November 2018
Publisher: The University of Chicago Press

International commerce is conducted using a limited number of national currencies, which are used to settle foreign trade transactions and store value for investors and central banks. The choice of how countries with currencies that gain international appeal use this status shapes their currency statecraft strategy. Issuing governments may welcome and promote the internationalization of their currency, tolerate it, or actively oppose it.

Benjamin J. Cohen provides a provocative explanation of the strategic policy choices at play in currency statecraft. His review, spanning from World War II to the present, highlights that one primary goal of currency statecraft is the extent of a country's geopolitical ambition, or its drive to build or sustain a prominent place in the international community. When a currency becomes internationalized, it generally increases the power of the nation that produces it. In the context of global politics, where competition and rivalry are constant, monetary rivalry plays a significant role.

One notable example of monetary rivalry is the emerging confrontation between the US dollar and the Chinese renminbi. Cohen delves into how China has vigorously promoted the international standing of its currency in recent years, even at the risk of exacerbating relations with the United States. He explains how the outcome of this competition could shape the broader geopolitical engagement between the two superpowers.

In conclusion, the use of national currencies as instruments of international commerce and their status as international appeal shape countries' currency statecraft strategies. The extent of a country's geopolitical ambition, driven by its desire to build or sustain a prominent place in the international community, plays a significant role in determining how it uses its currency. The competition between currencies, such as the US dollar and the Chinese renminbi, highlights the importance of monetary rivalry in global politics. As the world continues to evolve, the dynamics between currencies and geopolitical tensions will likely continue to shape the global landscape.

Weight: 424g
Dimension: 160 x 236 x 19 (mm)
ISBN-13: 9780226587691