Introducing a Common Currency on the New Silk Road
Introducing a Common Currency on the New Silk Road

Summary/Abstract: The article deals with the decline of the U.S. dollar as the world’s currency for payments and reserve accumulation. We propose a model for using an alternative common currency for a geographically and economically connected group of countries along the New Silk Road – China, Russia, Kazakhstan, Azerbaijan, Georgia, Turkey, and Belarus. The model assumes a common currency parallel to national currencies, backed by highly liquid commodities that most countries in this community have in surplus – crude oil, natural gas, gold, iron ore, coal. The collateral is sufficient for a large increase in the volume of mutual trade. The use of a backed currency requires governance based on political consensus among several countries. This model allows to test the abandonment of fiat currencies in world trade.

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