Many experts believe that the U.S. dollar’s global hegemony, which has endured for nearly 80 years, is finally coming to an end.
This outcome is not impossible: Economic crises, increased domestic polarization and strong geopolitical headwinds could indeed culminate in the currency’s meltdown. But it is not likely.
Debates about the future of the international monetary system often fail to appreciate the greenback’s full-spectrum dominance, which requires understanding its role in public and private markets, as well as the various incentives to hold dollars. So long as self-reinforcing synergies and forms of opportunism continue to prevail, narrowing the yawning chasm between the dollar and other currencies will remain difficult.