Moving toward a multi-currency system

Even a decade after the global financial crisis, the world economy has not fully recovered because the structural problems that precipitated the crisis have not been entirely eliminated. Complicating the matter is a series of policies the United States has adopted to shift trade and financial risks.

The US dollar has dominated the global financial system due to historical reasons. The exchange rate system that pegged other currencies to the dollar served as the cornerstone of the Bretton Woods system. However, the Bretton Woods system itself collapsed after the US terminated convertibility of the dollar to gold in 1971, ushering in the era of free-floating currencies and making the dollar a reserve currency.

But the Trump administration's protectionist and unilateral policies, together with the US' massive debts, have exposed economies to the risks of the free-floating dollar, prompting many countries to break away from the "US dollar regime" and shift toward a multipolar currency system.