A Research On The Path Of Rmb Internationalization

The sub-prime loan crisis in U.S. has escalated to global financial crisis in 2008, which spread among the real economies and made the global economy contract. This huge change will impact the existing international currency system and offer us an excellent opportunity to contribute the process of RMB internalization. China should seize the chance to move the process further and more profound.On one hand, we will benefit on the internalization of RMB from the increase of seigniorage and the net financial revenue by investing the RMB reserve assets; on the other hand, our status and influence could be promoted across the world, and our dominance in the global currency system could be raised as well. However, RMB internalization could be pros and cons somewhat. If we can not choose the appropriate time and strategy to make it move profoundly, the process itself could bring catastrophic consequences to the safety of our financial environment. Therefore, the research on the path of RMB internalization is of great importance.The essay begins with the space-layer and currency functional layer of currency internalization in order to find a feasible path of RMB internalization, where the advice on the choice of path is come up. This essay follows a clue like this:Firstly, we defined currency internalization from the aspects of both space-layer and currency functional layer and introduce the related theories; Secondly, through the research on the realized internalization path of US dollar, Euro and Japanese Yen we concluded the experience that RMB internalization should be followed; Thirdly, we analyzed the existing status of RMB from the currency functional aspect and analyzed the cost-benefits of RMB internalization; At last, we incorporate the space-layer with currency functional layer of currency internalization, which are the 3 phases of internalization paths incorporating the functions of medium of exchange, measure of value and measure of reserve, to research the internationalization path from bilateral layers and meanwhile come up the advices and measures related to different phases.