Will Dollar ($) still be the top currency in the world in 2050?
The US dollar earned its current position as the world’s leading global reserve currency because it had the world’s largest economy at the end of WWII, and was largely trusted by the rest of the world.
Basically, it earned its position because the UK had been bankrupted by WWII, and the Soviet Union had a command economy, and relatively little economic influence outside the countries it occupied at the end of the war.
While there were countries which were not friendly to the US, like China after 1949, and Iran during the Mossadegh period, they were economically small, and had very little influence.
Now though, China has the world’s largest or second-largest economy, depending on how your measure it. It wants more countries to use the yuan in trade instead of the dollar.
Many Americans don’t realize it, but the US dollar earned its position because of a lot of hard work and deliberate economic and foreign policy moves by US officials and successive US administrations. We can argue about the motivation of these policies, but we can’t argue with their results.
However, if the Trump administration treats alliances with other countries as a protection racket, and demands that the US be paid for stationing US military in their countries, many governments are going to start asking if they want to have the US as their ally, or to use the US dollar as a reserve currency, especially if China is the rising power and the yuan is offered as a good alternative? Compared with the US, China is not demanding protection money, it just wants to trade.
Isn’t that a much more attractive alternative for most countries?
This is how the Trump administration is dismantling US influence around the world.