The Future of World Currency

Running Head: THE FUTURE OF WORLD CURRENCY 1
THE FUTURE OF WORLD CURRENCY
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THE FUTURE OF WORLD CURRENCY 2
Following the huge national debt as well as the aggressive foreign policies which have
been enacted recently in the United States, there is a possibility that the international financial
system might change significantly in the next decade. This is in consideration to the fact that the
current foreign economic policies which have been put in place to govern the US economy and
its huge national debt have led to a “de-dollarization” and made the dollar to lose its reserve
currency slowly (Aiyar, 2009). Statistics have it that 70% of the word traditions are traded in the
US dollar, 20% in euro and the rest in Asian currencies, mainly in Chinese yuan. These statistics
are changing slowly following the emerging trends in the world economy. For instance, China
has recently led a powerful blow on the US dollar in the global energy market when it opened
trade in oil futures for its currency (Chinese Yuan) and which is the third widely used currency
internationally, and the attempt was embraced with absolute success.
For that matter, although the US dollar has been the only widely used currency in the
world market especially when trading in raw materials, the Chinese yuan is likely to start
pushing through the fastest growing oil markets sector (Cooper, 2009). And not just through
hydrocarbons. Consequently, in the bilateral trade partners of the dominant financial partners like
Moscow and Beijing, the US dollar has also lost its fame to the Chinese yuan. In 2017 for
instance, the share of Chinese yuan currency utilization in the Russian international trade hit
15% and has henceforth been increasing which has resulted to a decline in the usage of US dollar
as a common exchange currency.
The current trade agreements between Russia and China to trade for yuan and rubles have
also hit the news headlines since the first conference which was held in 2014 and such a payment
will not depend on US, UK and other prominent banks implying that US dollar will have lost its
base in these two countries. In a similar case like this of Russian-Chinese agreement, Iran has