Deutsche Bank, a major financial institution managing about $1.5 trillion in assets, has issued a warning that the US dollar might lose its strong position in global markets.
In a recent report, the bank highlights how changing international relations are putting pressure on the dollar, which has been seen as a safe choice for a long time.
Analysts at Deutsche Bank believe that ongoing global conflicts and new economic partnerships could weaken the dollar’s dominance.
They mention the BRICS group—made up of Brazil, Russia, India, China, and South Africa—that is looking into alternatives to using the dollar, including the idea of a new reserve currency.
This situation is also influenced by the growing popularity of digital currencies and new trade methods around the world.
George Saravelos, who leads the currency process at Deutsche Bank, worried how meaningful and critical this condition may come out, citing the rapid shifts ensuing globally.
While the dollar is still the main currency used around the world, the bank cautions that its unique benefits—known as “exorbitant privilege”—may not last forever.
The report cites recent market fads, such as an unexpected drop in the dollar’s value even after the US imposed tariffs, as signs of this risk.
This warning has caused a lot of discussion among financial experts. Some contend that the dollar’s designated role in trade and finance will shield it from an instantaneous fall.
