The End of Dollar Domination

ituglobal

Master Trader
Apr 17, 2013
515
31
69
The U.S. occupies a special place in the global economy. We hold the world’s reserve currency. The dollar dominates because the dollar denominates.



Everybody accepts U.S. dollars; everyone wants U.S. dollars. This gives the U.S. many advantages like lowered exchange rate risk and increased buying power, but this won’t last forever.



Historically, one country has held the dominant reserve currency for about 100 years (give or take 20 years). Although the U.S. was formally declared the reserve currency after World War II, it was informally used as the reserve currency since the 1920s after World War I.



That’s 100 years...



Again, these things don’t happen overnight. It’s a slow-moving transition that’s obvious only after a few decades have passed, but I think the days of the U.S. dollar as the world’s reserve currency are coming to an end.



This shouldn't be cause for fear or alarm as we're resilient. We'll tiptoe through these troubled times, and we'll emerge stronger as a result.



What’s more, I think we can do better.



The positive aspect of holding the world reserve currency is that the U.S. has been able to help provide stability and confidence in the financial system.



The negative aspect is that it concentrates power and influence in the U.S., sometimes at the expense of smaller and weaker nations.



Moreover, when the U.S. financial system looks shaky (as it has the past few days), it causes reverberations throughout the world.



I believe we’ll look back on the days of reserve currencies as a kind of “financial colonialism,” where one country had outsized power to exercise its will on smaller, weaker nations. I suspect we'll be ashamed of this period of U.S. history. We may even try to make reparations, but that day is likely far into the future.



Of one thing we can be sure... The days of the U.S. dollar's dominance will eventually come to an end. History shows us it's not a question of if, but when.



When the U.S. dollar is dethroned, what will replace it?” - John Hargrave


[URL deleted]
 
Last edited by a moderator:

fargana

Active Trader
Nov 14, 2022
131
17
29
34
While the US dollar's dominance as a reserve currency remains strong, there are signs that other currencies are gaining traction. For example, central banks in some countries have been diversifying their foreign exchange reserves away from the US dollar and towards other currencies. Additionally, some countries have been looking to reduce their reliance on the US dollar for international trade, and are exploring alternative payment systems such as digital currencies.
 

Ara

Trader
Apr 24, 2023
107
19
19
34
The U.S. occupies a special place in the global economy. We hold the world’s reserve currency. The dollar dominates because the dollar denominates.



Everybody accepts U.S. dollars; everyone wants U.S. dollars. This gives the U.S. many advantages like lowered exchange rate risk and increased buying power, but this won’t last forever.



Historically, one country has held the dominant reserve currency for about 100 years (give or take 20 years). Although the U.S. was formally declared the reserve currency after World War II, it was informally used as the reserve currency since the 1920s after World War I.



That’s 100 years...



Again, these things don’t happen overnight. It’s a slow-moving transition that’s obvious only after a few decades have passed, but I think the days of the U.S. dollar as the world’s reserve currency are coming to an end.



This shouldn't be cause for fear or alarm as we're resilient. We'll tiptoe through these troubled times, and we'll emerge stronger as a result.



What’s more, I think we can do better.



The positive aspect of holding the world reserve currency is that the U.S. has been able to help provide stability and confidence in the financial system.



The negative aspect is that it concentrates power and influence in the U.S., sometimes at the expense of smaller and weaker nations.



Moreover, when the U.S. financial system looks shaky (as it has the past few days), it causes reverberations throughout the world.



I believe we’ll look back on the days of reserve currencies as a kind of “financial colonialism,” where one country had outsized power to exercise its will on smaller, weaker nations. I suspect we'll be ashamed of this period of U.S. history. We may even try to make reparations, but that day is likely far into the future.



Of one thing we can be sure... The days of the U.S. dollar's dominance will eventually come to an end. History shows us it's not a question of if, but when.



When the U.S. dollar is dethroned, what will replace it?” - John Hargrave


[URL deleted]
The dominance of the U.S. dollar as the world's reserve currency has been advantageous for the U.S. economy, but it's likely to come to an end as history shows that no currency remains dominant forever. This slow-moving transition may take a few decades, and it shouldn't be a cause for alarm. While the reserve currency status provides stability, it also concentrates power and influence, sometimes at the expense of smaller and weaker nations. The end of the U.S. dollar's dominance may mark the end of a period of "financial colonialism." However, what will replace the U.S. dollar as the world's reserve currency remains uncertain.
 

Chadpowell

Trader
Apr 8, 2023
71
20
14
New York
The U.S. occupies a special place in the global economy. We hold the world’s reserve currency. The dollar dominates because the dollar denominates.



Everybody accepts U.S. dollars; everyone wants U.S. dollars. This gives the U.S. many advantages like lowered exchange rate risk and increased buying power, but this won’t last forever.



Historically, one country has held the dominant reserve currency for about 100 years (give or take 20 years). Although the U.S. was formally declared the reserve currency after World War II, it was informally used as the reserve currency since the 1920s after World War I.



That’s 100 years...



Again, these things don’t happen overnight. It’s a slow-moving transition that’s obvious only after a few decades have passed, but I think the days of the U.S. dollar as the world’s reserve currency are coming to an end.



This shouldn't be cause for fear or alarm as we're resilient. We'll tiptoe through these troubled times, and we'll emerge stronger as a result.



What’s more, I think we can do better.



The positive aspect of holding the world reserve currency is that the U.S. has been able to help provide stability and confidence in the financial system.



The negative aspect is that it concentrates power and influence in the U.S., sometimes at the expense of smaller and weaker nations.



Moreover, when the U.S. financial system looks shaky (as it has the past few days), it causes reverberations throughout the world.



I believe we’ll look back on the days of reserve currencies as a kind of “financial colonialism,” where one country had outsized power to exercise its will on smaller, weaker nations. I suspect we'll be ashamed of this period of U.S. history. We may even try to make reparations, but that day is likely far into the future.



Of one thing we can be sure... The days of the U.S. dollar's dominance will eventually come to an end. History shows us it's not a question of if, but when.



When the U.S. dollar is dethroned, what will replace it?” - John Hargrave


[URL deleted]
Agree!
You can see affects on the market and brokerages too.
Brokerages used to have USD based all the time and now most of them have other account types too. Also, USD can not affect other pairs like the old days!
Hope that it will be changed......
 

Leobest

Trader
May 19, 2023
1
0
6
28
australia
Dollar dominance refers to a potential shift in the global financial system away from the United States dollar as the primary reserve currency. There are many countries that use the US dollar as their reserve currency, which is why it is commonly referred to as the "dollar-dominated" international monetary system.

Discussions about the end of dollar dominance are influenced by a number of factors. Rising economic influence of emerging economies, such as China, India, and Brazil, is one of the key factors. Several of these countries have seen their economies grow rapidly and have expressed a desire for their currencies to play a greater role in international trade.

Furthermore, some countries are dissatisfied with the US dollar's dominance and its perceived impact on their economies. There have been discussions about diversifying reserve holdings and exploring alternative international monetary arrangements prompted by concerns about the US' monetary policy decisions, geopolitical considerations, and the potential risks associated with heavily relying on a single currency.

There have been efforts made by countries and organizations to reduce their reliance on the US dollar. In order to diversify their reserves, some central banks have increased their holdings of other currencies, such as the euro, the Japanese yen, or the Chinese yuan. There have been bilateral currency swap agreements established between countries to allow trade in local currencies without requiring US dollars.

During the past few years, the Chinese yuan has gained attention for its internationalization. As a potential reserve currency, the yuan has been promoted to be used in cross-border transactions in China.

It is important to note, however, that the US dollar continues to dominate the global financial system. The US financial system is deep and highly liquid, and it is widely accepted and trusted. International trade and financial transactions still rely heavily on the US dollar, which is also the biggest economy in the world.

Despite continued discussions and efforts to reduce dollar dependence, a complete transition away from dollar dominance would require significant changes in the global financial system, including the establishment of viable alternatives and a consensus among countries to adopt them. In the event that the process were to take place, it would likely be time-consuming and challenging.