“The international financial system is based on the U.S. dollar. The greenback is both the world’s “reserve currency” — the one everyone wants to hold when things go bad — and the principal means of exchange. The vast majority of transactions between companies, countries and people are denominated in dollars.
As my investment-oriented colleagues regularly discuss, the dollar’s dominance isn’t unchallenged. The Chinese yuan, in particular, has pretensions to become a second global currency, one so widely used that transactions unrelated to China could be conducted in yuan.
But there’s another challenge on the horizon: a new international interbank system that could create important opportunities — or chaos — for the world economy, depending on how the proverbial ball bounces.”
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