I really have no idea where the notion that a reserve currency is necessary and that dollar will remain central to the global economy until an alternative emerges comes from. There doesn’t need to be a new reserve currency for the dollar hegemony to end. What’s going to continue happening is that countries will increase bilateral trade using currency swaps, and commodities will act as value stores instead of the dollar. It’s also worth noting that China’s CIPS has already surpassed SWIFT in single-day transaction volume.
The dollar is going to remain central to the global economy until either China offers a replacement for a massive consumer market for other countries to dump their excess production into or the American empire is not longer capable of threatening other countries into using dollars. Also, that article you shared is using a long debunked rumour from a few months ago. SWIFT is still far bigger the CIPS, it processes around ~$35 trillion a day (per https://archive.is/YEWAx), which is far larger than even the figure the article you shared uses as a source (which says that CIPS processed ~$2 trillion in one day). Likewise, that source itself has been disputed by the Chinese central bank, per: https://finance.eastmoney.com/a/202504183381053098.html
Another obvious option is a BRICS currency along the lines of Bancor that Keynes suggested which could be backed by a basket of commodities. This would be a far more appealing option because it would ensure that a single country wouldn’t dominate global financial system the way US does today. However, in the short term bilateral swaps work just fine as can be seen at scale in Russia which is cut out of western trade pretty much entirely at this point.
It’s also not clear to me what leverage the US has into threatening countries into using the dollar. The main leverage the US has is its shrinking consumer market. As we already saw with the tariff war, the US can’t throw its weight around like it used to.
And noted regarding the article, but that doesn’t affect my original point that there doesn’t need to be a direct replacement for the dollar for the dollar to fall out of use.
I really have no idea where the notion that a reserve currency is necessary and that dollar will remain central to the global economy until an alternative emerges comes from. There doesn’t need to be a new reserve currency for the dollar hegemony to end. What’s going to continue happening is that countries will increase bilateral trade using currency swaps, and commodities will act as value stores instead of the dollar. It’s also worth noting that China’s CIPS has already surpassed SWIFT in single-day transaction volume.
The dollar is going to remain central to the global economy until either China offers a replacement for a massive consumer market for other countries to dump their excess production into or the American empire is not longer capable of threatening other countries into using dollars. Also, that article you shared is using a long debunked rumour from a few months ago. SWIFT is still far bigger the CIPS, it processes around ~$35 trillion a day (per https://archive.is/YEWAx), which is far larger than even the figure the article you shared uses as a source (which says that CIPS processed ~$2 trillion in one day). Likewise, that source itself has been disputed by the Chinese central bank, per: https://finance.eastmoney.com/a/202504183381053098.html
Another obvious option is a BRICS currency along the lines of Bancor that Keynes suggested which could be backed by a basket of commodities. This would be a far more appealing option because it would ensure that a single country wouldn’t dominate global financial system the way US does today. However, in the short term bilateral swaps work just fine as can be seen at scale in Russia which is cut out of western trade pretty much entirely at this point.
It’s also not clear to me what leverage the US has into threatening countries into using the dollar. The main leverage the US has is its shrinking consumer market. As we already saw with the tariff war, the US can’t throw its weight around like it used to.
And noted regarding the article, but that doesn’t affect my original point that there doesn’t need to be a direct replacement for the dollar for the dollar to fall out of use.