I need a dollar

Every so often an appetite surges for an alternative reserve currency—and an alternative market booms in predictions of the greenback’s imminent demise. For nearly three-quarters of a century the dollar has at a global scale dominated trade, finance and the rainy-day reserve portfolios of central banks. Yet high inflation, fractious geopolitics and the sanctions imposed by America and its allies on countries such as Russia have lately caused dollar-doubters to become vocal once again.

Most recently it was Luiz Inácio Lula da Silva, Brazil’s president, who on a recent visit to China called for emerging markets to trade using their own currencies. At the same time, a surging gold price and a fall in the dollar’s share of global reserves has roused other naysayers, who can also point to the recent admission by Janet Yellen, America’s treasury secretary, that over time using sanctions "could undermine the hegemony" of the currency.

However, the starting advantage of the dollar is immense. Between a third and a half of global trade is invoiced in dollars, it is involved in nearly 90% of foreign-exchange transactions; and about half of cross-border debt is dollar-denominated. It also still accounts for a 60% share of central-bank reserves. No other currency is close to matching this ecosystem’s size, or its fundamental appeal: the supply of safe assets available to dollar investors.

What is increasingly clear, though, is that individual countries can circumvent the dominant system if they really want to. And many do want to. Many no longer want to need a dollar.