An Analysis On International And Domestic Constraining Factors Of The Currency Internationalization From The Perspective Of The Currency Rise Country

The global financial crisis started from the United States in 2008 exposed the huge impact of the hidden dangers of US financial system on the world.The abuse of dollar hegemony once again became the focus of world public opinion and academic criticism.The economies including China began to talk about the reform of the international monetary system and tried to curb dollar hegemony through internationalization of local currency.What internal and external specific constraints the currency rise countries may faces in the process of internationalization of national currency,and why,in the same international monetary system,the rise of some currencies succeeded,such as the German mark,yet the rise of the other currencies failed,such as the yen,became the objects of collective research among international relations and international political economics scholars.Currency internationalization is a process in which a country aim at shaping the currency into owning universal international circulation and settlement functions and an international currency as general and major international reserve currency.The international monetary system is always composed a dominant currency and a number of key currencies at a time.The "currency rise countries" was described in term of international currency in this study,which means non-international currency-dominated countries with the ability and intention to internationalize their currencies.The restrains of system structure and currency-dominant country are the external constraints currency rise countries faces in the process of currency internationalization.At the same time,the two-level games formed by internal interest groups and political structure and the state’s general currency diplomacy strategy are the internal constraints of currency internalization,which come down to political leadership.As far as historical experience is concerned,there is no international currency in modern times that is not formed and maintained by state’s domination and protection.Under the same dual external pressures of international monetary system and currency hegemony,there still exist success cases and failure cases,which shows that the external constraints are not decisive to currency internationalization.Thus,in order to make a country’s currency internationalization succeed,internal constraints must be resolved first.This conclusion provides a useful theoretical perspective for the internationalization of RMB.The feasibility of RMB internationalization exists in the three aspects: domestic financial system reform,monetary partner diplomacy,reform and construction for a more fair and reasonable international monetary system of inclusive growth.Finally,a new international monetary system should be a moderately balanced system without a currency hegemony.And this multiple balance needs to be established in a widely and formally recognized international institutions.