To challenge a dominant global currency, the economy behind an emerging competitor would need to be large, diverse and institutionally and financially developed, a new paper from the Banque de France says.

Researchers Kai Arvai and Nuno Coimbra argue that to maintain the dominance of a global currency, the economy backing it has to grow at a pace at least on a par with the global average, otherwise it may become susceptible to a challenger.

The researchers built a model of two open-economy