Even though the US dollar has lost some dominance as a monopolistic reserve currency in the past decades, it still has the largest market share by far. And the ones trailing behind it are mostly currencies belonging to the mis-called western allies (How is Japan western? Lol).
The euro has about 20% share of the world’s reserve currencies, then comes the British pound and the Japanese yen. The Chinese renminbi has a mere ~2% share of the pie.
So put simply, the global economy runs primarily on dollars(~60%) and western alliance currencies. This has been true for decades, despite repeated predictions of imminent change. In fact, we are now entering our 6th decade of dire predictions of the dollar’s collapse, dating back at least to 1971, when President Nixon ended the dollar’s convertibility into gold.
In the 1980s and 1990s, the yen was going to take over, then the euro was supposedly going to take over, now Bitcoin pundits pray for it to replace it, and western opponents hope for the Chinese renminbi to be the new heir. Nevertheless, as of now the dollar and western alliance hegemony persists in the reserve currency arena.
Each time there is a crisis like the pandemic or the Ukraine war, people claim that this time is different. But, the pandemic has reinforced the dollar’s credibility rather than weakening it. There is still no real challenger. Although Russia has outmaneuvered financial agressions to protect its ruble after the financial isolation of Russia by the G7, and altough China’s economy is close to surpassing that of the USA, the dollar and euro until today, remain the world’s two main reserve currencies.
All these reserve currencies are fiat currencies, basically IOU’s, backed by nothing but confidence on their future purchasing power stability. They are all controlled by central banks who in turn are controlled by the central bank of the central banks, the BIS(Bank of international settlements). Yes, you guessed it, the proponents and architects of the CBDCs which I have covered before.
Stay tuned for my next post on this very transcendental subject of CBDCs concerning individual freedom and privacy.