Abstract
This article focuses on the transition of the international monetary system to a multipolar structure. The international monetary system continuously evolves, reflecting developments in the world economy. The main problem of the current international monetary system is its dependence on one key currency which still remains the US dollar. The authors of this study address the issue of a transition towards a multipolar system by examining currency concentration. The primary objective of this work is to establish whether or not the current international monetary system shows signs of transitioning towards multipolarity. To achieve this, the authors have used tools measuring the level of market concentration. The change of polarity of the international monetary system is analysed with concentration ratios and the Herfindahl-Hirshmann index. The theoretical part focuses on definitions of key terms essential for this study, such as international monetary system, currency polarity, global currency, and currency concentration. For the practical part, data were sourced from the databases of global institutions, namely the International Monetary Fund (IMF), Bank for International Settlements (BIS), Society for Worldwide Interbank Financial Telecommunications (SWIFT) and the European Central Bank (ECB). This part focuses on a period of time between 2001 and 2019, and the results indicate that the current international monetary system shows signs of transitioning towards a multipolar structure. The level of currency concentration of the key reserve currencies dropped slightly, although not enough to cause a qualitative change of the current international monetary system. This study may serve as a base for future research on this topic.
Highlights
The weakening role of the US dollar in the international monetary system and the transition to a multipolar monetary structure have been the subject of many studies
When we look at data concerning the period between 2001 and 2019 (Tab. 3), it is immediately obvious that no multipolar monetary system was created during this period
The aim of this article was to address the issue of a possible change in polarity of the international monetary system through the concept of currency concentration in the first two decades of the twenty-first century
Summary
The weakening role of the US dollar in the international monetary system and the transition to a multipolar monetary structure have been the subject of many studies. The international monetary system, with the US dollar as the global currency, constituted a unipolar structure. In the 1980s, this dominance was challenged by the Deutsche mark and the Japanese yen. Not even they were able to succeed in replacing the dollar as the world’s reserve currency (Eichengreen, 2011; 2019a). After the global financial crisis of 20072008, the sustainability of the US dollar dominance became a matter of great debate once again (Masson & Dailaimi, 2009; Zhou, 2009; Cohen, 2011; Obstfeld, 2011; Fahri et al, 2011). At the G20 meeting in Paris in 2010, the reform of the international monetary system was proposed by the French president, Nicolas Sarkozy. (Bennhold, 2010) Due to the debt crisis in the Eurozone in the following years, this reform was postponed
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
