Conflicting Currencies: An Examination of the USD and the Geoeconomics of the International Monetary System

What is the future of the United States dollar within the international monetary system? The dollar has certainly enjoyed supremacy as a unit of account, store of value, and medium exchange since World War II, but what about new challengers (most notably the euro and Chinese yuan)? Using “geoeconomic” analysis to determine what strategies or actions a state might pursue in the international political economy can help to begin answering these questions. Geoeconomic considerations used in this paper do not dismiss cultural, political, or military aspects of international power relations, they supplements them. The short-run status of USD preeminence within the international monetary system is stable, but medium and long-term prospects are more uncertain. Important currency contenders, such as the euro and yuan, raise important political and economic problems for the U.S.’s borrowing, policy options, and, ultimately, its national sovereignty. Future outcomes and possibilities will be explored to highlight the need for the U.S. to fix its domestic issues in order to retain currency supremacy and national control