ABSTRACT
Special Drawing Rights (SDR), together with gold and forex, are an international reserve asset. They were created by the IMF in 1969 to supplement member countries’ official reserves, in order to support growing international trading and financial activities. There have been many discussions on how to enhance the SDR creation and allocation mechanism and how to expand the application of SDR. Drawing on the lesson of Libra’s experiment with super-sovereign currency and the application of Multi-CBDC Bridge, we propose a CBDC-based innovative design of SDR. SDR innovations are mainly in five areas: 1. payment; clearing and settlement infrastructure; 2. intrinsic value; 3. issuance and redemption mechanism (i.e. the primary market); 4. trading mechanism (i.e. the secondary market); and 5. SDR-denominated assets.
