The Decline of the US Dollar's Reserve Currency Status: A Shift in Global Economic Power The concept of a reserve currency is deceptively simple: it refers to a country's currency that is widely held by central banks and governments around the world as a store of value, unit of account, and medium of exchange.
For the United States, this has meant that the US dollar (USD) has been the global standard for international transactions, with over 60% of all foreign exchange reserves held in dollars.
However, this dominance is slowly eroding due to a combination of factors. The rise of alternative currencies such as the euro (EUR), yuan (RMB), and yen (JPY) has been particularly noteworthy.