> Every floating rate currency held outside its native borders is "reserve"
This is empirically false. Offshore currency holdings make offshore financing in your currency easier. That makes financing deficits less likely to produce domestic inflation.
Quantity and diversity of the offshore holders of one's currency matter. There is a qualitative difference between the U.S. dollar and Argentinian peso.
It isn't. It is accounting fact. Every currency held outside its borders is a foreigner saving that currency. That's all a reserve is.
Lots of people like to hold US dollars. Fewer Argentine pesos even within the country.
Actually having fewer people hold you currency makes it easier to run. You just make your budget in that currency balanced by increasing taxes. If you have lots of people saving your currency then let them - and accommodate the savings.
This is empirically false. Offshore currency holdings make offshore financing in your currency easier. That makes financing deficits less likely to produce domestic inflation.
Quantity and diversity of the offshore holders of one's currency matter. There is a qualitative difference between the U.S. dollar and Argentinian peso.