Why the Dollar Is Still King – For Now
Despite growing talk of the U.S. dollar losing its global dominance, the world still isn't ready to let go of the greenback.
That’s the message from Eswar Prasad, a trade policy expert at Cornell University, who argues that although recent U.S. political shifts have rattled confidence, no serious contender has stepped forward to replace the dollar at the heart of the global financial system.
Prasad points to rising concerns around Washington’s policies—ranging from former President Trump’s tariffs to his challenges to the Federal Reserve’s independence—as potential threats to the dollar’s status.
However, he stresses that global reserve currencies aren’t replaced simply because of internal dysfunction. They’re displaced only when something better emerges—and right now, that’s not the case.
Europe faces political fragmentation. Japan struggles with low growth. China’s tightly controlled markets and opaque policies continue to deter international investors. In short, while the U.S. has created reasons to question its monetary leadership, its rivals have failed to offer convincing alternatives.
Some international investors are scaling back U.S. asset exposure, and there’s increasing talk of de-dollarization. But Prasad sees this as more a symptom of diversification and short-term shifts than a sign of structural change. Other economies lack the liquidity, transparency, and institutional depth needed to absorb global capital at scale.
Although the dollar’s grip may be loosening at the edges, Prasad believes it’s still far from collapse. For all its flaws, the U.S. remains the least risky bet in an uncertain world.
“America’s advantage,” he suggests, “comes less from its strengths than from everyone else’s weaknesses.”
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
