US Dollar's Dominance Faces Slow Decline Amid Growing Global Competition

For over two centuries, the US dollar has been the dominant global currency. Its widespread use is due in part to its adoption as a reserve currency after World War II and its continued use by the majority of countries in international trade.

The dollar's role is also reflected in its high demand for bonds, which allows the US government and companies to borrow at lower interest rates. However, this 'exorbitant privilege' has been resented by many other countries, who see it as unfair that their own currencies are not treated similarly.

Historically, dominant currencies have maintained their status even after their issuing country ceased to be the global economic power. Eichengreen's book argues that the dollar may eventually lose its dominance, but this process is likely to take a long time.