New World Order or Hype: Challenging the Dollar's Dominance

Recent reporting, particularly in alternative media, has given the impression that the greenback is on its way out. We take a closer look here.

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On June 11, the International Monetary Fund (IMF) again warned of the "stealth erosion" of the US dollar's dominance. According to the organization, the USD's share of global central bank reserves dropped from over 70% in 2000 to about 55% in the final quarter of 2023. This downturn in dollar reserves has been the subject of much debate between those who argue that the greenback is in terminal decline and others who contend that the currency's dominance is unassailable, at least for now. This debate comes amid the rise of other currencies, such as the Chinese renminbi and Australian dollar, and reports that new alternatives are on the horizon.

Despite current trends, data suggests that the USD's share of global reserves, while lower than in previous decades, is considerably higher than alternatives such as the Japanese yen, British pound, and Chinese renminbi. With approximately 88% of all foreign exchange transactions carried out using the dollar and no viable alternatives on the market, the greenback will likely remain the global reserve standard for years to come. In this article, we explore how judgments as to the greenback's imminent demise are, at the very least, premature and likely the product of great power posturing.