Xenocurrency

What is a Xenocurrency?

A xenocurrency is a currency which trades outside of its home country.  The name sounds a bit strange, but that is because the root word "Xeno" means foreign or strange, hence the name name xenocurrency.  When a xenocurrency is deposited in another country, it is called and quoted in eurocurrency as the Euro is the most valuable currency in the world.  It was once feared that inflation would be on the rise because there were too many central banks holding part of their reserves in xenocurrencies.  Banks got involved in the practice in the first place because reserve requirements and interest rate restrictions were not subjected to domestic banking regulations.