Proponents of de-dollarization might resent America¡¯s exorbitant privilege all they want. But what can they do about it?
Analysts usually trace the U.S. currency¡¯s hegemony to its outsized use in international commerce. Even a decade after China eclipsed the U.S. as the world¡¯s largest goods-trading nation, that dominance doesn¡¯t appear to be fading. The much-awaited petroyuan has so far been just a myth, even though some dollar-starved importers like Pakistan are keen to pay for Russian crude in the Chinese currency.
An even bigger moat may be the greenback¡¯s role in fundraising. It will take the People¡¯s Republic a long time to match the depth, liquidity and openness of the dollar-denominated capital market in which firms and banks borrow and hedge their risks. A proposed common currency for the so-called BRICS grouping of Brazil, Russia, India, China and South Africa may flounder for the same reason.
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