> The problem with replacing the world reserve currency with something else is that nobody can agree on what that something else should be.

It isn’t a decision made by some sort of vote, or done overnight. It’s an emergent phenomenon. Sterling had already lost the role de facto by the time Bretton Woods blessed the role of the dollar de jure.

Whatever replaces the dollar will be messy because it won’t have the set of systems the dollar had at its peak (large, highly liquid markets; complete convertibility; bonds backed by huge government spending coupled with huge GDP).

There is really only one alternative and it’s not a great one. It’s not China, as the government is afraid of letting go of control (thus no complete convertibility) and markets lack credibility which impairs liquidity.

The only other opening is unfortunately the Euro. Large, liquid markets yes in aggregate but national markets (e.g. France, Germany) are not unified. They weren’t in the US when the dollar became the reserve currency either, but times have changed. The bond markets are likewise not unified, so risk is higher. But they do have complete liquidity, which is the most important of all after GDP size.

So there will be chipping away at the dollar for years.