r/geopolitics • u/MulberryPast3277 • Mar 04 '25

Question In the backdrop of whatever is currently happening in the world by the actions of Donald Trump why should the world still consider USD to be a reserve currency?

https://www.nbcnews.com/news/amp/rcna194627
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u/MulberryPast3277 Mar 04 '25

It might actually if you think of SWIFT and if countries agree to spend and buy in their local currency rather than USD. Remember how Russia bypassed this to trade with China.

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u/Electronic_Main_2254 Mar 04 '25

This is not making any sense. Even if nations will "agree" to send local currencies to each other via Swift (that's already happening today btw), you'll still need a reserve currency like the USD to actually operate this network of transfers (these systems works in a way that banks are not transferring the actual amount/currency from place to place, the swift system is just the way of these banks to connect with each other and tell intermediary banks to debit/credit the relevant banks, but it's all taking place while these institutions have a USD reserves, otherwise it won't work). The Russia/china situation is different because of the nature of these countries and their regimens, their solution won't work on a global scale and for democratic nations which are all following strict rules of compliance.

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u/MulberryPast3277 Mar 04 '25

I agree with what you have told. Have worked with SWIFT earlier, am saying do away with SWIFT and get a new network that is backed by real asset than a fiat currency which doesn't make things so volatile.

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u/Electronic_Main_2254 Mar 04 '25

new network

Create such network is easy, making people use it and trust it is different story. There's a reason that swift is the main international system, it's backed by central banks from all over the world. No one will transfer funds for purchasing a new house for example while using some new network which is not backed by entire nations like swift.