The International Monetary Fund (IMF) has just printed $650 billion in “Special Drawing Rights”, or SDRs, and distributed them towards central and development banks across the global economy.

This is the first time in history where a central bank that is not part of a sovereign nation has issued so much money – more than half a trillion dollars. Just bear in mind that not a single official at the IMF is elected by citizens across the world.


The IMF states the SDR “is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members”.

The price of each SDR is linked to each member currency within the basket and at the end of August 2022 one SDR was worth $1.40. So basically the SDR is an asset in the form of a contract that gives a member a claim on another member’s currency within the basket of currencies.

If that sounds complex, it’s by design. But in simple terms SDRs are a global currency solely available to central and development banks.

Special Drawing Rights could be dubbed as various types of financial instruments; some people could call them a derivative, an asset-backed security (ABS) or even actual fiat currency itself.

However, SDRs cannot be traded over the markets or purchased from banks or exchanges (not yet anyway). SDRs are an asset available just for central and development banks.

The IMF does state that it holds the ability to allocate SDRs to the BIS and various regional banks.

The IMF created Special Drawing Rights in 1969.

204 billion ($285 billion) in SDRs were issued between 1969 and 2020.

Each SDR value is based on the value of five currencies: the US dollar; pound sterling; euro; Chinese renminbi and the Japanese yen.

SDRs are an international reserve asset used in addition to official reserves.


The last distribution of SDRs was in 2009 when members received $250 billion in SDR reserves and they were distributed out in order to help ease the financial crisis.

This time countries will be able to use their allocated SDRs to support their economies and to fight against the pandemic. An official IMF document did state countries that receive the allocations should not prolong economic reforms or a restructuring of its debt. 

Afghanistan and Venezuela are both suspended from receiving SDRs, Belarus has not been suspended but there are calls for them to be locked out from the allocations. The IMF ended up allocating them $1bn in SDRs.

“The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis.”

Kristalina Georgieva, IMF Managing Director

 IMF Managing Director Kristalina Georgieva

IMF managing director Kristalina Georgieva is encouraging developed countries to distribute their allocated SDRs to poorer countries that need them more than they do. She has asked countries to contribute towards the IMF’s Poverty Reduction and Growth Trust for low-income countries. Will developed countries take the IMF’s advice? We shall soon see.

Within the next three months more details will be published about the countries that become recipients of the newly issued SDR currency.

Fiat currency is backed up by nothing. Fiat currencies are within the SDR basket, so SDRs are backed by currencies that are backed by nothing. So SDRs are intrinsically worth nothing – they are a copy of a copy of a copy.


I firmly believe the SDR will become the next global reserve currency replacing the dollar. The USD status as a global reserve currency is not sustainable and when the dollar does cease to become a reserve currency, SDRs will replace it and that is one of the main intentions of the SDR.

The world is moving away from the dollar because it is losing purchasing power very quickly. $1 now purchases much less than 20 years ago, and in 20 years $1 will purchase much less than what $1 can purchase today. 

Many people within the investment and trading world have come to the conclusion the dollar’s power status will eventually end; inflation, political hostility and the decline of oil will all contribute towards the dollar’s demise.

When the next crisis comes, the actions that occurred during 2008 and 2020 may not be available on a global level. This is because too much currency has already been created, which threatens a hyperinflation and a breakdown of global trade and co-operation, so the ability to print money may falter and interest rates spike.

This is where the SDRs come into play. The IMF could print them and allocate them to central banks, which could then acquire the ability to lend out existing capital, and this could protect their currency from inflation.

For example, instead of the Bank of England printing new pounds when the next crash comes, it could borrow SDRs from the IMF and that would free up current pounds within the BoE’s reserves. The central bank can then buy up government debt (like during the pandemic) with these pounds. And because the bank is lending money from the IMF instead of printing new pounds, the GBP money supply will not increase and it avoids the risk of high inflation linked to rising import costs and a fall in purchasing power – a potential problem solved.

There is a very strong argument that SDRs are the new form of modern monetary theory (MMT), just not the MMT most people have in mind.

Central banks from the Fed to the Bank of England to the ECB are all full up with debt and are all mildly vulnerable. It will be very hard for them to embark upon excessive money printing without causing a sharp rise in inflation, and the territory of hyperinflation will be knocking on central banks’ doors within the next 10 years.

Therefore, if we do repeat the events witnessed during 2008 and 2020 again, due to global central banks currently being vulnerable, the only option available will be to layer the SDRs across the global central banking system.

If central banks get into deep trouble the only entity that could bail them out will be the IMF and its SDRs. The IMF’s balance sheet is very strong, the IMF is a lender of last resort and the IMF created and currently holds SDRs. The IMF could literally issue new SDRs and use them to takeover sovereign central banks when they get into financial trouble.

That is unelected officials issuing new money to financially takeover central banks, who are also run by unelected officials. Crazy stuff.

SDRs aren’t coming down the road, they are here already.