Russia and China are out to undermine the U.S. dollar, and if they succeed it will change the world for ever
America’s superpower status is cemented by the global might of the dollar, but a growing movement aims to build a new financial order
There is only one true superpower. Since the end of the Second World War, we’ve seen the United States bestride the world like a colossus.
What makes the US such a potent ally and formidable adversary? Its nuclear arsenal? This helps. As does its incomparable navy and huge, hi-tech army. The soft power from its ubiquitous contributions to culture is clearly important. But none of these really explains America’s unique ability to project power globally. This is conferred by the mighty US dollar.
Its status as the undisputed reserve currency (it accounts for around 60 per cent of world reserves, compared with just 20 per cent for its nearest rival, the euro) means that Washington’s tendrils extend into almost all banks and financial institutions.
Few, if any, major companies are safe from its influence. As a result, the US can slap crushing financial sanctions on foreign firms or governments anywhere in the world.
Look closely at a dollar bill, however, and you’ll see there’s a target on its back – a target brought into sharper relief by events in Ukraine and the West’s reaction to them. Russia and China are gunning for it. If they can end the dollar’s primacy with a mix of digital and cryptocurrencies and alternative payment systems, US supremacy will end, too – and the world will change for ever.