Credit Suisse: US Dollar Hegemony May Be Replaced by 'More Multipolar Monetary System'

While the dominance of the US dollar in the world may be waning, it seems unlikely that another currency may replace the USD hegemony with one of its own, according to Credit Suisse.

The global monetary system centered on the US dollar may undergo fundamental changes in the coming years, a new report issued by financial firm Credit Suisse has suggested.

“Changes in the global economy” and the “economic policy responses” that occurred in recent years are some of the factors which the report’s authors suggested raise a question about the future of the international monetary system and the world’s premiere reserve currency. Likewise, they cited the current geopolitical situation, which sent ripples across financial markets.

During the past 20 years, the share of the US dollar in global foreign currency reserves has gradually decreased, while the share of China’s renminbi and currencies other than the euro increased, slowly but steadily.

In light of these developments, the report suggests that we may be looking soon at the emergence of a “more multipolar monetary system.”

The scenarios involving the creation of some sort of common global currency were deemed unlikely by the people who composed the report.