The Special Drawing Rights (SDR) is an international reserve asset created by the International Monetary Fund (IMF) to supplement the official reserves. Usually, the value of the SDR is determined by the spot exchange rates at a specific time and are posted on the IMF website daily.
The SDR has been dependent on Gold as a currency and was once defined as 0.888671 grams of Gold equivalent to a dollar. Indeed, time flies!
Later, the SDR was redesigned to be a basket of currencies. However, these currencies had to meet two requirements; its free usability and export criterion. Both of these qualities are properties that the SameUSD stablecoin has.
Why is SDR interested in Stablecoins?
According to an Investopedia report, the IMF has been considering a cryptocurrency for the Standard Drawing Rights. This was hinted by former IMF Director Christine Lagarde at a forum in England in 2019. The IMF’s interest to reevaluate the SDR’s mechanism by replacing reserve currencies with digital currencies is slowly becoming a reality.
However, not all cryptos qualify to be in the basket of cryptocurrencies in the SDR. According to the fundamental rules that govern the IMF’s SDR, the digital currencies involved must at least be “freely usable”.
Samecoins’s group of stablecoins, such as SameUSD, SameGBP, and SameEUR, are all stablecoins representing the value of internationally freely usable fiat currencies like the US dollar, British Pound and European Euro.
A digital currency like SameUSD can be used as part of the SDR’s reserve currency, and it can be used for international trade transactions. The IMF has demonstrated significant interest in the crypto world, and although an IMFCoin was proposed, already existing stablecoins such as SameUSD could offer greater utility.
Today, cryptos have made a strong statement in the financial world; people are increasingly adopting regular cryptocurrencies and stablecoins. So far, SameUSD has proven to be a unique stablecoin that works as an effective cushion against market volatility while maintaining high levels of transparency in reserve assets.
Why SameUSD is a better Stablecoin for SDR
SameUSD has established itself as a superior stablecoin among its peers, thanks to the unique and thoughtful approach to its underlying asset reserve. SameUSD serves as a perfect currency for SDR because of the following reasons:
- SameUSD is the best replacement for the US dollar in the crypto world since it has a stable and verifiable reserve of other US dollar-backed stablecoins.
- It is an ideal currency for online payments since it offers fast, secure, and reliable online payments in crypto through blockchain technology.
- Finally, as the SDR requires, SameUSD provides the most stable store of value.
The SameUSD reserve system is perfect since it cushions itself from any possible risks or controversies that may face a single stablecoin in its reserve basket. This way, no single stablecoin in the reserve can disrupt SameUSD’s value.
This is an excellent way to ensure a stable store of value as is required by the IMF’s SDR. For instance, Tether USDT has had significant controversies surrounding the credibility of its reserve assets. Such negative publicity would not significantly affect the value of SameUSD, although SameUSD has USDT as part of its stablecoin reserves.
The SDR is actively working towards bouncing back and reclaiming its relevance in international finance. For this reason, the IMF must consider the impact of cryptocurrencies on international finance. It is a good thing that the IMF has already embraced cryptocurrencies too. SameUSD appears to provide all the requirements to be a candidate for consideration in the SDR in the not-so-far future.