Chinese Yuan Poised to Take Over US Dollar According to Economist

The allure of the US dollar is waning, according to Paul Gruenwald, the global chief economist at ratings agency S&P Global. Speaking at a conference in London on Tuesday, Gruenwald said the greenback ‘doesn’t have quite the pull it used to’ and ‘will no longer be the dominant world currency.’

The warning comes as countries around the world are flocking to backup currencies for trade following sweeping sanctions against Russia that expelled the country from the US dollar-dominated global financial system. Gruenwald cited a growing volume of trade that’s being done in the Chinese yuan as an example.

However, a survey by the Bank of International Settlements in 2022 showed that the US dollar accounted for almost 90% of global foreign currency transactions. Nobel laureate and economist Paul Krugman also weighed in on the debate, writing in an op-ed for the New York Times on Friday that the greenback’s dominance won’t last forever — ‘because nothing does.’ He added that while its dominance might be fading, the US dollar is far from being replaced as the world’s leading currency in the short term.

It remains to be seen how the US dollar’s role in the global financial system will evolve in the coming years.