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The two sound very similar, almost identical:

  • The dollar as a world reserve currency
  • The dollar as a world reserve asset

But I'd venture there are important distinctions. As an asset, the dollar is important for capital adequacy ratios. For the currency dimension, this seems to be more for cross-border/settlement side. Yet I think I'm just scratching the surface, and I've seen the two used almost interchangeably. I'd like to explore what the actual, textbook, uber-orthodox comparison should look like, to see where the most meaningful differences lie.

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What, if anything, should we hold to be different when discussing a world reserve 'currency' versus a world reserve 'asset'?

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  • $\begingroup$ Unlike currency, an asset usually cannot be used to buy things. A world reserve asset are for example the SDR (special drawing rights) from the IMF. $\endgroup$
    – AKdemy
    Jan 9 at 9:24

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Difference is that world reserve asset is broad term that includes not just currencies but other assets such as gold.

That is the gist of it. If you want all the details have a look at IMF report:

Clarifying the Concept of Reserve Assets and Reserve Currency

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