China is now promoting the global role of the renminbi, an objective which it also uses as an anchor for domestic reforms. 17 And the ECB’s position is one of neutrality. We view the international role of the euro as being primarily determined by market forces and we neither hinder nor promote it.
One reason for such diverse approaches is that the benefits and costs of international currency status differ from country to country and are difficult to measure. 18 Take the benefits first. One benefit is seigniorage, i.e. interest-free loans to the issuing central bank from non-residents who hold the international currency. In the current environment of low interest rates, this benefit is arguably very limited.