The Dollar Remains King

Key Takeaways

  • The U.S. dollar has remained dominant as the king of currencies for the past 50 years, despite predictions of its impending downfall.
  • The most important precondition for the U.S. dollar to lose its dominance would be the existence of a viable alternative currency, which currently does not exist.
  • The threat of sanctions is a significant driver of the angst and rhetoric against the U.S. dollar’s dominance, as many countries lack access to the dollar and face consequences if they do not comply with sanctions.

And there is no apparent successor. For the better part of 50 years, there has been one prediction that has been persistently in the headlines and persistently wrong—the impending implosion of the U.S. dollar. The sheer dominance of the dollar makes it a clear target. Eventually, the U.S. dollar must share its crown as the king of currencies. Right?

World - Official Foreign Exchange Reserves by Currency