Euro and Yuan Challenge Dollar’s Reign as World Reserve Currency: A Looming Shift in Global Finance
Geneva, Switzerland – June 29, 2025 – A potentially seismic shift in the global financial landscape is brewing, as top officials from the European central Bank (ECB) and the Chinese Central Bank signal a weakening of the US dollar’s dominance as the world’s primary reserve currency. Recent discussions between ECB President Christine Lagarde and Governor of the Chinese central Bank phan Kung-Šeng suggest both institutions believe the dollar is losing its “special position” and should be replaced – with the Euro and Chinese Yuan positioned as potential successors.
For decades, the US dollar has reigned supreme. Currently, the dollar accounts for over 46% of global and central bank reserves, dwarfing all competitors [[1]]. An astounding 88% of foreign exchange transactions and 54% of cross-border trade are settled in dollars.However, this dominance is showing cracks, especially in its role as a reserve currency held by central banks.
Lagarde sees an prospect for the Euro to ascend, while Phan favors a multi-polar system potentially led by the chinese Yuan.Whether this represents a realistic near-future scenario or remains a distant aspiration remains to be seen. This development comes amidst escalating economic tensions between Washington and Beijing,with implications for global trade and finance.
