It is no secret that the United States is the number one global power thanks to military supremacy, as well as the dollar being the number 1 global currency.

There is increasing talk of the end of this dominance drawing near, but it has yet to happen, and probably won’t. The likely successor currency is no secret. The rise of China and its dominance in the global economy also introduces the Chinese Yuan.

While the dollar has weakened, its dominance in international trade remains. The US and its allies have frozen reserves held by the Central Bank of Russia, affecting all central banks worldwide.

Foreign exchange reserves are predominantly held in USD, Euro, Japanese Yen, and British Pound.

Because of the dominance of the American dollar, it serves as a leverage tool in imposing sanctions.

Countries affected by sanctions seek alternatives to the USD. The increase in the share of other currencies in international trade and the growth in reserves held in other currencies are direct consequences of this.

The influence of the dollar in the real effective exchange rate has further increased since the 2008 crisis and is a safe haven for most investors. I do not see this advantage shifting in the future as the United States will not easily relinquish it.

Oil and its trading still predominantly occur in dollars, but other currencies are increasingly mentioned. In the case of India and Russia, China and Russia do not use USD, while even Arab oil exporters wanted to abandon the dollar and had announced it, but ultimately the pressure from America was too great, leading to abandoning the changes.

A danger to the USD is the increasing US debt, which spills over to other countries due to the high reserves they hold in the American dollar.

Considering the size of its economy, China is the primary challenger, but given that China is a communist country, it is unlikely that the world will accept the Yuan as its currency.

Will the dominance of the USD weaken? Probably, but the USD remains number 1 regardless.