Although the dollar has suffered from the decline of the United States in global trade – from around 18% in 2000 to 12% in 2025 – it has remained, over the past two decades, the dominant currency in international trade. No credible alternative seems capable of calling it into question, according to economist Enrico Colombatto.
Certainly, over the past year, the situation was rather mixed: the dollar exchange rate weakened against the euro and the pound sterling (from 0.95 to 0.85 and from 0.79 to 0.74), and strengthened against the yen (from 150 to 155). At the same time, its role as a store of value has weakened slightly on a global scale, from 60% in the mid-1990s – with a peak of 70% in 2000 – to 57.8% in 2024. This decline must however be put into perspective in relation to the euro, which represents 19.8% of foreign exchange reserve assets in the world, or the renminbi (barely more than 2%).
Outside of fiat currencies, gold remains the primary reserve asset. Its price has increased by around 65% over one year, but the quantities held by central banks have only increased marginally, by 3 percentage points. Despite repeated announcements of massive purchases, there has therefore been no significant reallocation.
For Enrico Colombatto, there is little doubt about the dominance of the dollar, despite initiatives intended to compete with it, whether cryptocurrencies or monetary zones around the renminbi or BRICS. Of course, this does not mean that it is in good health: since 2020, it has lost almost 20% of its purchasing power; foreign investors seek alternatives to U.S. debt securities; American actions are considered expensive… Added to this are the uncertainties linked to American economic policy.
As for gold, it retains its status as a safe haven, but its volatility – comparable to that of stocks and higher than that of bonds denominated in dollars or euros – limits its use as a store of value. This volatility deters central banks, keen to avoid being held responsible in the event of a fall in prices, and prevents its use as a unit of account in commercial exchanges.
On paper, the euro could be an alternative. Christine Lagarde recently suggested that global demand for the euro could increase, particularly if Europe strengthens its military capacity and develops secure assets. But for the author, it is the opposite that seems more likely: investors are wary of highly regulated economies and monetary policies considered risky. The euro is suffering from the weakness of the European economy and significant regulatory constraints.
The economist concludes in these terms: central banks can seek to reduce their dependence on the dollar, but no credible alternative is necessary in the short term. The most likely scenario therefore remains the maintenance of its domination, with a gradual diversification of reserves towards gold, the demand for which should increase in a context of uncertainty… without calling into question the central role of the greenback.
