Rethinking the Power of Money - Essays by:

While the dollar’s strength and the influence of the United States in the financial sphere remains, the global financial order that Washington was instrumental in establishing is being challenged with the rise of digital money. [...] sanctions that could tip the scales in favor of the yuan over the dollar, leading the renminbi to become a new regional vehicle currency that would give it even a fraction of the kind of influence the dollar enjoys today. [...] The dollar’s rise as currency to the world What makes a currency a good candidate for a global one? In many ways, becoming a dominant global currency require the same attributes for a 1 The US economy is the largest in the world and accounts for about 25% of world output at market exchange rates but the US dollar represents close to 60% of the world foreign reserves. [...] This combined with the additional cross-border payment systems that the Chinese central bank is facilitating and the reality of increasing geopolitical tensions that are likely to lead the world separated into blocs are the true forces that will slowly boost the role of the renminbi. [...] In the past, controlling the levers of these drivers was completely out of the hands of small businesses, leaving them to the mercies and vagrancies of supply and demand, and currency dynamics.