A basket currency refers to a monetary unit that is composed of a combination of different currencies. It is designed to provide stability and reduce the risks associated with relying on a single currency. The concept of a basket currency has existed for several decades, with notable examples including the European Currency Unit (ECU) and the Special Drawing Rights (SDR) utilized by the International Monetary Fund (IMF).
Creating a currency basket involves carefully selecting and weighting the currencies that will be included. The aim is to represent a diverse range of economies and minimize the impact of fluctuations in any single currency. The weights assigned to each currency in the basket are typically based on factors such as trade volumes, economic stability, and market value. Once the currency basket is established, it can be used as a reference point for exchange rates and as a benchmark for economic performance. By spreading the risk across multiple currencies, a basket currency can help promote stability and mitigate the impact of individual currency fluctuations.
The IMF publishes the exchange rates of the SDR on its website. The SDR is not available to the general public, and is used for a claim by the governments of any country.
The SDR, or Special Drawing Rights, is a basket currency composed of various international currencies. It is not available for purchase by the general public, as it is primarily used by governments. The weights assigned to each currency in the basket are based on factors such as trade volumes and economic stability. The exchange rates for the SDR can be found on the IMF website.
Through the innovation of the verus coin team, the first non-custodial decentralized on-chain basket currency was launched. The initial launch was for the Bridge.vETH basket currency, held by 4 reserves in an equal 25% weighting:
To buy the Bridge.vETH basket currency, download the Verus Mobile wallet from the app/play store.
On-chain of course! However, the currency basket index is easily viewable at the eth-bridge page at verus. Another resource used by p2p marketmakers, is the raw chain data presented at the raw.verus.trading.
