The dynamics underlying the choice of exchange rate regimes suggest that the international monetary system may be more vulnerable than recent history indicates. Because of potential bandwagon effects, small changes in anchor currency choices can have large and rapid effects on the international monetary system. History shows that an unraveling of the dollar as the dominant anchor, reserve, and vehicle currency would not be very exceptional. The falls of the Dutch guilder, the classical gold standard, and the pound sterling all suggest that such a restructuring of the international monetary system is a real possibility. This paper investigates an alternative configuration of the international monetary system that would be based on regional anchor blocs. Analogous to Robert Mundell‟s seminal 1961 work on Optimum Currency Areas, these regional anchor blocs could be called Optimum Anchor Currency Areas.

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