The US Dollar has been one of the stable currencies and leading in the money market. Due to this stability, the dollar has been used as a reserve for most foreign banks (Kirchner, 2019) . Other currencies use the dollar to weigh their value and know their standpoint in the economy. However, with the rapid growth in the utility of Chinese currency in Africa, the emergence of the BRICS trade block, and the UN and IMF making a push for a new global reserve currency, the dollar is expected to lose its value in the future.
China has become one of the biggest economies second to that of the US. Africa has become one of her biggest trading partners. They have been aggressively pushing to expand the use of their currency in the African continent. Recently, several banks in Africa, among them, Bank of Ghana, are using renminbi (RMB) as their reserve currency. Nigeria's central bank has also reportedly announced that they would be shifting from dollar to yuan as their reserve currency, while RMB gains greater traction in global trade.
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The United Nations and IMF are pushing to have one world reserve currency alternative to the dollar. IMF has even taken a further step by proposing to have a global currency called 'Bancor' that will be issued by a future global central bank. This move will cripple the dollar and deny it a chance to be the benchmark for other currencies.
Additionally, Brazil, Russia, India, China, and South Africa, who are BRICS members, are pushing for an agreement of using their national currency when trading with each other rather than using the dollar. This agreement is expected to scale up intra-BRICS trade that will stir a greater economic momentum, which might lower the dollar's value.
Since it is the US dollar's stability that makes it the world reserve currency and a benchmark for others, things are expected to change. With all these initiatives set to revolutionize the global economy, their success will lead to the dollar's instability. However, the dollar will remain one of the top currencies, but it will lose its title as the world money benchmark.
Reference
Kirchner, S. (2019, November 11). THE ‘RESERVE CURRENCY’ MYTH: THE US DOLLAR’S CURRENT AND FUTURE ROLE IN THE WORLD ECONOMY . Retrieved from UNITED STATES STUDIES CENTRE: https://www.ussc.edu.au/analysis/the-reserve-currency-myth-the-us-dollars-current-and-future-role-in-the-world-economy#australia-and-the-us-dollar
