Rethink

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Sounds,·25 Jun 2026,·28 mins

Available for over a year

The US dollar is the backbone of global trade and held by governments around the world as a safe haven in times of crisis. It's so powerful that countries like Ecuador and Panama have adopted the dollar as their official currency, while Argentina for many years has tried to "dollarize" its economy. But what happens if nations and private institutions were to lose trust in the dollar? How did we get here? Well, after WWII the world order was re-established in part by tying the monetary systems to the value of the dollar, backed by gold. But since 1971 President Nixon cut that link to gold and the entire exchange system has since been tied directly to the dollar itself, its historic success and access to its financial markets. That success gave America what was dubbed an "exorbitant privilege" to print money without fear of inflation and to build up national debt without consequence. It also enables the US to flex its muscles on the international stage by imposing sanctions on countries and cutting off access to their all-important currency. That has led some countries, most notably China, to call for the dollar to be replaced as the world's reserve currency. How difficult would it be to untangle the dollar from global trade, can any other nations offer the same conditions which has allowed the US currency to thrive, and what would happen if the dollar's role was replaced by newer digital currencies which operate outside traditional government control? Presenter: Professor Ben Ansell Producer: George Dabby Editor: Damon Rose Contributors: Martin Wolf, Chief Economics Commentator at the Financial Times Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley David Shrier, Professor of Practice, AI & Innovation with Imperial College Business School Stephanie Flanders, Head of Economics and Politics at Bloomberg News Zanny Minton Beddoes, Editor-in-Chief of The Economist Material from: British Pathé, "Bretton Woods Money Pact Signed" (1946)

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The US dollar functions as the world's primary reserve currency, anchoring global trade and serving governments as a safe store of value. Following the 1971 end of the gold standard under President Nixon, the dollar's purchasing power has derived from itself—its track record, US financial market access, and widespread institutional reliance. This arrangement has provided the United States with significant economic advantages: the ability to manage monetary supply with reduced inflation pressure and to operate with elevated national debt levels. It also enables the US to wield economic influence through sanctions and financial exclusion. A subset of nations, led by China, have proposed alternatives to dollar-based systems. Emerging digital currencies operating independently from state apparatus represent one potential avenue, though restructuring global commerce away from dollar dependence would require overcoming substantial practical and institutional obstacles.

Read the full story at BBC ↗

Use BBC.com or the new BBC App to listen to BBC podcasts, Radio 4 and the World Service outside the UK.

Find out how to listen to other BBC stations

Sounds,·25 Jun 2026,·28 mins

Available for over a year

The US dollar is the backbone of global trade and held by governments around the world as a safe haven in times of crisis. It's so powerful that countries like Ecuador and Panama have adopted the dollar as their official currency, while Argentina for many years has tried to "dollarize" its economy. But what happens if nations and private institutions were to lose trust in the dollar? How did we get here? Well, after WWII the world order was re-established in part by tying the monetary systems to the value of the dollar, backed by gold. But since 1971 President Nixon cut that link to gold and the entire exchange system has since been tied directly to the dollar itself, its historic success and access to its financial markets. That success gave America what was dubbed an "exorbitant privilege" to print money without fear of inflation and to build up national debt without consequence. It also enables the US to flex its muscles on the international stage by imposing sanctions on countries and cutting off access to their all-important currency. That has led some countries, most notably China, to call for the dollar to be replaced as the world's reserve currency. How difficult would it be to untangle the dollar from global trade, can any other nations offer the same conditions which has allowed the US currency to thrive, and what would happen if the dollar's role was replaced by newer digital currencies which operate outside traditional government control? Presenter: Professor Ben Ansell Producer: George Dabby Editor: Damon Rose Contributors: Martin Wolf, Chief Economics Commentator at the Financial Times Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley David Shrier, Professor of Practice, AI & Innovation with Imperial College Business School Stephanie Flanders, Head of Economics and Politics at Bloomberg News Zanny Minton Beddoes, Editor-in-Chief of The Economist Material from: British Pathé, "Bretton Woods Money Pact Signed" (1946)

Read the full story at BBC ↗

The US dollar is the primary reserve currency held by governments worldwide and used as a safe haven asset during crises. Ecuador and Panama have adopted the US dollar as their official currency; Argentina has pursued dollarization policies. After World War II, the global monetary system was anchored to the dollar, which was itself backed by gold. In 1971, President Nixon ended the direct convertibility of the dollar to gold. Since 1971, the dollar's value has been tied to itself—its historical success and access to US financial markets. The dollar's role as reserve currency grants the US an "exorbitant privilege" to print money with limited inflation consequences and accumulate national debt without immediate penalty. The dollar's dominance enables the US to impose sanctions and restrict access to currency as geopolitical tools. China has called for the dollar to be replaced as the world's reserve currency. Untangling the dollar from global trade would present significant practical difficulties. Digital currencies operating outside traditional government control represent a potential alternative to dollar-based systems.

Read the full story at BBC ↗

• The US dollar serves as the global reserve currency, underpinning international trade and held by governments as a crisis buffer.
• Since 1971, when the US abandoned the gold standard, the dollar's value has rested on itself—its historical success and access to US financial markets.
• The dollar's dominance grants the US an "exorbitant privilege": ability to print currency with limited inflation risk and accumulate debt, plus leverage through sanctions.
• Some countries, notably China, have called for replacing the dollar as the world's reserve currency.
• Potential alternatives include digital currencies operating outside traditional government control, though untangling the dollar from global trade presents substantial structural challenges.