There is mounting evidence to suggest that China is working to dethrone the US dollar as the world reserve currency. Jared Bernstein, the Biden Administration's top pick to lead economic policy, voiced his concerns during his confirmation hearing that the US would “definitely not” be better off if such a drastic change were to take place. According to Mr. Bernstein, the main advantage of having the US Dollar as the world reserve currency is its ability to impose sanctions on other countries, and that this power should be preserved by raising the debt ceiling, as well as tackling out-of-control spending and fiscal responsibility.

However, the US Dollar’s power does come with its own drawbacks, particularly for US manufacturers. American exports become more expensive when the dollar is strong, which can result in lost revenue.

The results of the US Dollar becoming dethroned as the world reserve currency remain unknown, but Mr. Bernstein is one of many who believe the US would lose traction if this were to happen. The importance of protecting the dollar’s status, then, should not be overlooked. Having the US Dollar as the world reserve currency provides a major advantage over other nations, and it is essential for the US to keep its place as the world superpower. Though there are costs that come with this power, the US Dollar should remain the world reserve currency to ensure the US continually acts as the leader of global financial security.



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