Is the Dollar Losing Its Crown? Global Currency Power Shifts in the 2020s
The Shaking Dollar Hegemony ― Will It Lose Its Crown? --- Part I. How Did the Dollar Rise to the Throne? When we talk about today’s global economy, it is impossible to leave out the U.S. dollar. The dollar is not just a currency; it functions as the language of international trade and the unit of measurement for investors. According to the 2024 report by the Bank for International Settlements (BIS), 88% of global foreign exchange transactions involve the U.S. dollar. For comparison: the euro accounts for 31%, the Japanese yen 17%, and the Chinese yuan 7%. Even when combined, they do not reach half the share of the dollar. This means that whether it’s an investor in New York, a commodity trader in Brazil, a business owner in Africa, or an exporter in South Korea, global trade is almost impossible without using the dollar. But when, and how, did the dollar ascend to this “throne”? --- 1. The Bretton Woods System ― The Marriage of Gold and the Dollar In 1944, as World War II w...