Commentary
The U.S. dollar enjoys its world reserve currency status due to numerous factors: legal and investor security, an open and transparent market, as well as independent institutions with checks and balances that limit political power and strengthen the country’s currency in relative terms.
No, a country doesn’t have a world reserve currency due to military power. No one accepted the kopek when the Soviet Union ruled half the world. For a fiat currency to be a world reserve it needs to be widely accepted as a unit of measure, method of payment, and reserve of value.
The problem is that all of the above may be under threat….