The dollar’s secure status as the dominant global currency is under potential threat for various reasons, particularly because of the increasing use of financial sanctions against Iran, Russia, North Korea, and actors in other countries such as China. While some maintain that the dollar’s preeminence remains secure because of its incumbent advantage and the absence of compelling alternatives, others argue that these sanctions could drive reserve banks and financial institutions away from transactions and reserves in dollars. A frequently overlooked dimension of this debate, however, is the…
