US President Donald Trump is doing his worst to undermine the dollar with tariffs, attacks on the Federal Reserve and pushing the national debt higher toward US$38 trillion.
But the real threat to the dollar’s reserve currency status is happening behind the scenes in Beijing. There, officials are quietly and meticulously seizing the moment for a Chinese currency ready to fill the void.
To be sure, the dollar is still very much on top. It represents more than 58% of central bank reserves compared with the euro’s 20% and the yuan’s roughly 2%. Yet President Xi Jinping’s team is quietly building a vast and multi-layered yuan infrastructure in preparation for a dollar reckoning that Trump appears to welcome.