The Dollar Will Not Give Up Its Position: Why Its Real Competitor Will Not Appear Soon? 0 10

Discussions about the global dominance of the US dollar have persisted for years, but many experts are confident that its position will remain unshakable for a long time.

For example, the influential American asset management company Franklin Templeton believes that the dollar will retain its status as the world's primary currency. Sonal Desai, the firm's chief investment officer, highlights three powerful pillars on which the strength of the American currency rests in her analytical note.

Three Pillars of Dollar Stability

These are the colossal scale of the US economy – the largest in the world, the incredible depth and sophistication of its financial markets, and the unquestionable institutional reliability that inspires confidence. According to Desai, there is currently no single currency capable of truly competing with the dollar.

She emphasizes that establishing a full-fledged institutional framework to support such an alternative is a task not for years, but for decades. And although discussions about a potential decline of the dollar gained momentum during the unpredictable trade, geopolitical, and budgetary policies of Donald Trump, which, according to Bloomberg, somewhat diminished the attractiveness of American assets, the foundation of the dollar remains strong.

Why Are Competitors Lagging Behind?

Of course, some analysts look hopefully at the euro, gold, and even digital assets, trying to discern in them a future reserve currency. But Sonal Desai firmly refutes these speculations, stating: "The Eurozone is unable to issue a single reliable asset on a sufficient scale. The renminbi operates under capital controls and lacks full convertibility," adding that, in her firm belief: "In my opinion, a real competitor to the dollar is not even on the horizon yet."

And the numbers confirm this! Desai reminds us of the three-year review by the Bank for International Settlements for 2025: the dollar was involved in a staggering 89% of all transactions in the over-the-counter foreign exchange market. Meanwhile, the yuan, often touted as a potential rival, showed a modest 8.5%. Is this not proof of its dominance?