In hard currency areas, however, like the $ £ Sterling and the euro, reserves are likely to stabilize. We have already seen what has happened since the introduction of the euro. In the longer run – perhaps in another 25 years to 50 years – the world may move to only a few major currency areas, as some pundits have predicted.
In this scenario, foreign exchange reserve holdings could decline for if there are only a few currencies in the world, the need to hold foreign exchange is likely to be reduced. Perhaps then, Central Banks will say, enough is enough. 12  BIS Review 1/2006