De-dollarization will only make a minor dent in the greenback's dominance. The dollar's supremacy is reinforced by the United States' outsized involvement in capital markets, trade, and debt.
Following World War I, the US dollar began to emerge as a global trade currency. The value of the US dollar is now dependent on its global demand and not on the assets held by the American Government.
Efforts to de-dollarize gathered pace following moves made by Russia and China in the past year.
According to the Bank for International Settlements, the dollar accounted for 88 percent of global foreign exchange trade in 2022. However, the dollar's status as a worldwide anchor currency is unlikely to change anytime soon. Here why.
With its rising population and stream of immigrants, the United States has the benefit of a flexible and trainable workforce. Over 2.2 million individuals have moved from Mexico, India, and China.
The United States fosters and develops the entrepreneurial spirit. The country has a well-developed equity financing system, which includes angel investors eager to finance start-ups and an active venture capital market that aids in the growth of those enterprises
Tourism generates $1.9 trillion in revenue for the US economy, supports 9.5 million American jobs, and amounts to around 3% of US GDP.
To summarize, the dollar will continue to be dominant until a very huge economy with size presents some obstacles.