PKU Financial Review: Your 2026 new book Money Beyond Borders: Global Currencies from Croesus to Crypto traces the 2,500-year history of global currencies, from ancient Greek silver coins to central bank digital currencies. Against the backdrop of ongoing geopolitical conflicts, how does the historical evolution of global currencies you recorded in the book enlighten the current asset allocation strategies of countries and investors?

Barry Eichengreen: The two millenniums of monetary history recounted in my book are a reminder the global currency status is not something that can be taken for granted.  It is a reminder that the dollar's role as a safe haven and as the dominance global currency may not last forever. Depending heavily on the dollar for cross-border transactions comes with risks. As such, central bank reserve managers, corporate treasurers and other asset allocators should hedge their bets. And the best way of hedging their bets is by diversifying their portfolios across currencies.

PKU Financial Review: Your book focuses on the resilience of the US dollar hegemony and the trend of monetary multipolarity, which is highly consistent with our special theme of "Asset Allocation and the Reshaping of the Global Financial Landscape amid Geopolitical Conflicts". In your view, how do geopolitical conflicts (such as the Russia-Ukraine conflict and tensions in the Middle East) reshape the global currency pattern, and what impacts will this have on cross-border asset allocation and risk prevention?

Barry Eichengreen: The historical analysis in my book suggests that alliance politics are an important factor in the use of currencies in cross-border payments and, more generally, on asset allocation.  Central banks, governments and corporations tend to hold and use the currencies of their alliance partners.  That alliance partner tends to be regarded as a reliable steward of a country's foreign reserves.  Holding and using its currency is a show of good faith -- effectively, of thanks -- in that alliance partner.  Insofar as the United States is no longer necessarily seen as committed to its NATO alliance, and insofar as it went to war in the Middle East without first enlisting the consent and support of other countries, it is less apt to be seen as a reliable alliance partner, and therefore less apt to be seen as a reliable steward of other countries' reserves.  All of this is dollar negative, in my view.

PKU Financial Review: In Money Beyond Borders, you analyze the future roles of the RMB and the euro in the multipolar monetary system. Combined with the current global financial sanctions and the wave of de-dollarization, how should countries (especially emerging economies) adjust their asset allocation portfolios to balance the stability of reserve assets and the autonomy of monetary policy?

Barry Eichengreen: If countries seek to diversify away from the dollar, as they should, part of that diversification will necessarily be toward the euro and the renminbi, the currencies of the two biggest economies aside from the United States.  But as I describe in my book, there remain significant obstacles to the euro and the renminbi playing larger global roles. So countries should diversify or rebalance gradually.

PKU Financial Review: Your book covers the evolution from the gold standard to central bank digital currencies. In the context of geopolitical fragmentation, do you think digital currencies (including CBDCs) will become a new direction for global asset allocation? What opportunities and risks will they bring to the reshaping of the global financial landscape?

Barry Eichengreen: A theme of my book is that monetary technology always has been and always will be in a state of technological flux. The new technology -- the new set of payments rails -- is distributed ledger technology, informally known as blockchain. Cross-border transactions on these rails can be completed more quickly and at lower cost than using legacy technology.  The question is what unit will run on those rails. The US is betting on private label stablecoins, while Europe and China are betting on a combination of CBDCs and tokenized commercial bank deposits. In a scenario where geopolitical fragmentation is limited or contained, both will be part of the global financial landscape: countries in Asia, Africa and Latin America will use both alternatives in transactions with the large economies. In a world of serious geopolitical fragmentation, they will have to choose.