What will be the next world reserve currency?

Exploring the future of reserve currencies inevitably involves reflecting on their historical evolution. The pound sterling, created in the 12th century under King Henry II and initially tied to a pound of silver, stands as the world’s oldest active currency. Its dominance peaked during the British Empire's height in the 19th century, however, by the 1920s, the pound relinquished its role to the US dollar whereby ushering-in a new financial epoch. For over a century, the US dollar has played a commanding role in the global economy, underpinned by the US’s economic strength and military influence; it is central to the majority of commodity pricing, trade agreements and central bank reserves. Yet, whilst the dollar currently makes up about 60% of global reserves, this figure is gradually declining and could reduce to 40-45% by 2050, hinting at a shift toward a more decentralised financial system with shared reserve currency responsibilities. The US dollar’s once unchallenged supremacy i…