Since 2022, the major financial and political world has been discussing the role of the Dollar. And the views on it differ depending on the factors a country is going through presently.
Looking at historical patterns, it is clear that the current period is a century scenario. Thus, it becomes important to analyse its past, present and prospects.
First is the past, Without going into historical events dollar has been the choice of currency for roughly 75 years or more. Whether it was used to trade oil, gold or other goods or services. This trend was accelerated after the US Gold Reserve Act of 1934.
Second is the present, today the dollar dominates the financial and physical world trade. If we look at central banks' balance sheets then most of them are heavily invested in dollar-dominated assets. And during every financial crisis in recent times dollar and the US Treasury have been the go-to assets.
Third and final is the prospect, as Russia has demonstrated in the last few quarters that a country can survive and grow trade without depending on the dollar. This has motivated various countries to explore and start some level of trade in a local or non-dollar currency. Though it is progress towards a world of choice it is too early to announce dollars end.
The crucial moments might be 5 to 10 years that are ahead of us as the real and financial world goes through many volatile changes and periods of uncertainty.