Canadian Dollar… The Dollar Overseas

The equivalent value of $11.7 trillion USD is held across the globe in reserve currencies and since the end of the Second World War the USD has assumed the de facto title as the world’s reserve currency. Nevertheless, since the launch of the Euro, the predominance of the USD as a reserve currency has slowly decreased from around 71% of the global share in 1999 to 59% in 2021. Hence, in Q1 2020 of this $11.7 trillion dollar value, roughly: 59% was held in USD; 21% in EUR; 6% in JPY; 5% in GBP and the remaining 9% being held in other currencies (IMF 2020).

One currency that has become increasingly attractive to states as a reserve currency is the Canadian dollar. Since 2013 the IMF have been tracking CAD as a reserve currency, which has risen from 1.83% of global reserves in 2013 to 2.07% in 2020 – and is now the sixth most popular reserve currency in the world (IMF 2020).

Recently, Caribbean, South and Central American states are gravitating towards CAD as a reserve currency, indicating long term confidence in it and recognition of Canada as an increasingly integral economic partner. For example, in 2007 there were ongoing negotiations to progress the 1986 Caribbean-Canada Trade Agreement (CARIBCAN) – which provides duty-free access to the Canadian market for most commodities – into a more comprehensive free trade agreement. However, after seven rounds of negotiations, no such progression could be realised, meaning that the 1986 CARIBCAN agreement rolls over to 2023 (Deonarine et al. 2016:1). Hence, if in two years’ time there is stronger appetite for an agreement between Canada and the eighteen Caribbean territories, we may see them increase the Canadian dollar as a share of their reserve currencies.

Notwithstanding the Canadian dollar’s potential growth trajectory as a reserve currency, its increase is arguably overshadowed by that of the Chinese Yuan – the Renminbi (RMB) – as the CCP seek to further internationalise it. According to the Report on the Internationalization of RMB in August 2020, The People’s Bank of China continue to advocate growing the RMB’s share as a currency reserve by addressing convertibility issues and creating pools of offshore RMB liquidity (Wagner 2011). As Wieland Wagner of Der Spiegel’s argues – the CCP “would like to make the yuan one of the world’s anchor currencies, forcing other countries to maintain reserves of Chinese money and providing significant advantages for Beijing” (Wagner 2011).

While the Canadian dollar continues to find itself stored across a variety of central banks, the very planchet that the dollar is struck on is traveling around the world in a very different form.

Namely, since the establishment of the Royal Canadian Mint in 1908, Canada has been producing and exporting coins and planchets to over seventy countries. Historically, these have included the Norwegian krone, Yemenaes fil, Colombian peso and Thai baht. Indeed, by the Mint’s 100th year it was producing 1.7 billion coins annually for sixteen countries, including Papua New Guinea and Fiji (Royal Canadian Mint 2008:4). Given the wealth of Canada’s natural resources and mining infrastructure – in addition to the Mint having one of the world’s most advanced multi-ply plating technologies – countries see Canada as a favourable and secure location to outsource their own mint’s requirements. Hence, in 2020 alone, coinage exports amounted to just shy of two billion Canadian dollars and represented Canada’s fastest growing industry vis-à-vis exports, seeing a 90% increase between 2019 and 2020 (International Trade Centre 2021).

Therefore, in recent years we have seen a significant increase in dollars going overseas whether that is in the form of planchets, coins or for use as a reserve currency. Countries around the world are increasingly considering diversifying their reserve currencies and Canada’s ability to secure bilateral and multi-lateral trade deals will – to a considerable extent – dictate how inclined states are to hold Canadian dollars as a reserve currency. Additionally, given the CCP’s recent efforts to curb metal exports and technological advancements at the Royal Canadian Mint, it is likely that many states will consider Canada as a place to manufacture their planchets and coins. Hence, in one form or another, dollars produced or generated in the Great White North will continue to find themselves overseas – and you can bet your bottom dollar on that!
Rory Glass.

Deonarine, A. Hosein, R & Khadan, J. 2016. “CARICOM and Canada Good Trading Partners?”. Inter-American Development Bank. Available at:
IMF. 2020. “International Reserves and Foreign Currency”. IMF Data. Available at:
International Trade Centre. “Canada”. 2021. Available at:
Royal Canadian Mint. 2008. Royal Canadian Mint Annual Report. Available at:
Wagner, W. 2011. “China Plans Path to Economic Hegemony”. Der Spiegel. Available at:


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