: Heres the alternative to U.S. dollar dominance and its not a rival currency, gold or bitcoin

Theres a basic problem with the global financial system its too focused on the U.S. dollar. Yes, the U.S. is the worlds largest economy, but the dollar represents 60% of global foreign exchange reserves and 40% of international trade, despite U.S. GDP representing just a fifth of world output and being a counterparty for roughly 10% of global trade.

And over the years, the U.S. has increasingly weaponized the dollars hegemony in the financial system, most recently by freezing Russian reserve assets at the beginning of the Russia-Ukraine war. And while not every country is necessarily planning such a belligerent action, not everyone is happy with the U.S. calling the shots.

Thats led to talk that perhaps some other currency, or currencies, could replace the dollars role as the reserve currency, or maybe gold or even bitcoin could do the trick, but theres problems with each of those alternatives, from convertibility in the case of China, to cyclicality in the case of the euro. The fact the U.S. dollar DXY, -0.08% is trading around a 20-year high suggests the market doesnt treat any rival as a particularly compelling alternative.