There are many reasons why cryptocurrencies are becoming more prominent，but one key driver is central banks' race to the bottom in terms of interest rates，driving down the value of their own currencies. This has led many investors to look for alternative stores of value. Gold was a natural beneficiary，but cryptocurrencies offer benefits that gold cannot – speed and security of transfer，and ease of storage. However，in today's world，we believe that the Chinese Yuan (CNY) can play an increasingly significant role in a global investor's portfolio，especially as China's asset markets open up to foreign investors.

The US has one advantage that is coveted by all other policymakers around the world – the US dollar，the world's reserve currency. This gives the US much easier and cheaper access to financing，both for the US government and for US/global companies accessing this market. This can become self-fulfilling – as more and more borrowers tap the US dollar bond market，it becomes deeper and more liquid，becoming more attractive for investors and borrowers alike.

For most countries，the US dollar's reserve currency status is a fact of life and they have no chance of rivalling it. The potential exceptions to this are the Euro area and China. However，for the Euro area，the lack of a unified and liquid bond market is a significant impediment. While the pandemic recovery fund – Next Generation EU - will be financed by debt jointly backed by all EU governments，this is seen as a one-off measure rather than the first step towards an integrated Euro area government bond market.

For China，there is some fragmentation in the government bond market，with some debt being issued centrally and some by local governments，but the fact that it represents one sovereign nation (and not several countries with hugely different financial profiles) mitigates this drawback significantly. The fragmented market can also be seen as offering investors with different investment options. Meanwhile，the local corporate bond market is reasonably well developed.