The way I (state certified smoothbrain) think of it is this: Cash reserves serve as short time collateral when a state is shopping on credit (which states usually do). So your transactions need to be backed by a currency your trading partner is willing to accept.
Other types of reserves exist, but these usually need to be converted first, which adds a layer of delay and transaction that makes it a more long term thing.
Not sure how correct it is, but I find that this oversimplification works and is correct most of the time.
The way I (state certified smoothbrain) think of it is this: Cash reserves serve as short time collateral when a state is shopping on credit (which states usually do). So your transactions need to be backed by a currency your trading partner is willing to accept.
Other types of reserves exist, but these usually need to be converted first, which adds a layer of delay and transaction that makes it a more long term thing.
Not sure how correct it is, but I find that this oversimplification works and is correct most of the time.