I kind of, sort of, sometimes appreciate Mr. Greeley (#850724, #1075083). He's a decent financial journalist, with a mind oriented toward the right themes.

Today he's out in the FT talking about currency hegemony (and got the attention of the godfather himself, Eichengreen, to retweet him!)

It’s possible that the dollar’s absolute dominance as a currency is fading. It should be comforting that there have been other dominant currencies. We should be able to know when the end is near, and what’s coming next.
We do not know. We cannot know. Dominant currency regimes don’t come and go that often.
We could count them on one hand, maybe two. We don’t know what will replace the dollar because the dollar is its own currency regime, unique in the way all currency regimes are.

Very correct, very apt.

"There are no enduring, permanent rules for dominant currencies. To believe that there are is to assume there have been enough of them to know them perfectly""There are no enduring, permanent rules for dominant currencies. To believe that there are is to assume there have been enough of them to know them perfectly"

Our beloved Mr. Mundell...

...argued that dominant currencies come from states with large domestic markets, consistent monetary policy, stable politics and open capital markets. For a currency to be great, its country must be, too.

The aforementioned Eichengreen modified that slightly:

More recently the economic historian Barry Eichengreen pointed out that great currencies came from republics, which could protect investors from rapacious kings.
Gold florins and ducats were minted by Florence and Venice, for example. The guilder by the Dutch Republic. Or sterling. Or the dollar.

"These rules are useful but not perfectly predictive; it’s possible to find exceptions. "

esp for some global-ish monies that were running the monetary show well outside the jurisdiction of its issuers (so both large domestic market and protection from thieves go out the window).

The most bitcoin-like reminders are the Dutch guilder (stemming from a ledger) or the Florence florin (stemming from convenient long-range payment mechanism):

The gold florin became a standard in the late 13th and early 14th centuries when bankers in Florence developed merchant banking, using bills of exchange to move value around Europe. They sent their agents and often their coins to England, Germany and the Low Countries. The Dutch guilder became a standard in the 17th century when Amsterdam became a centre for writing and clearing bills of exchange for Atlantic and Baltic trade. The balance sheet of the Bank of Amsterdam served as a single common ledger for payments among merchants, backed 100 per cent by deposits of silver and gold coins.

(Sidenote: that 100% Wisselbank claim is not quite correct... it started like that but degenerated very quickly over the 17th century -- can dig up a backing-chart if any ~econ nerd is keen)

...and since Greeley argues that the BoE's development/improvement over the Bank of Amsterdam was its not-completely-backed-by-gold status, the article starts falling apart a little in its narration.

"America’s Federal Reserve, like the Bank of England, has had to learn how to lend dollars to the world in a panic.""America’s Federal Reserve, like the Bank of England, has had to learn how to lend dollars to the world in a panic."

it, too, rests on a different financial arrangement. In the years that sterling was a dominant currency, the UK ran a capital surplus — it lent to the world. The US, by contrast, borrows from the world. Two dominant, stable empires, two different currency regimes.

archive being stupid: https://archive.md/Nj2SD