“Currently the US exerts huge control over global financial activity as a result of the dominance of the USD in payments systems. Consequently the threat that a company’s access to USD payments systems could be blocked carries significant weight,” note Rabobank analysts.
“This is why there have been accusations that Trump has weaponised the USD. That said, creating an alternative reserve currency to the USD is not an easy option.”
“Since its inception in 1999, the EUR has consistently been the second most used currency and the gap between itself and the USD is large on almost every measure. Central banks continue to hold a significantly greater share of reserves in USDs, a greater amount of debt is issued in USD internationally and more international payments are denominated in USD.”
“The EUR might make some progress in catching up with the dollar if the EC is successful in increasing its use in international transactions, though in reality the single currency’s reputation is
likely too closely linked with crisis for it to make any meaningful threat to the USD’s position in the next decade at least.”