The gravity model can explain the bilateral inter-country payment flows by currency very well. The economic sizes of the origin and destination countries significantly and positively affect bilateral payment flow denominated in any given currency, while distance and other factors that increase...

To play the role of a unit of account, an international currency must be a currency widely used to invoice international trade. This paper investigates the determinants of the use of currency in trade invoicing and evaluates the potential of the renminbi for the denomination of cross-border...