pretty much all economists and commentators state that the replacement will be a basket of currencies not a single currency, where each countries' basket will be weighted by the typical trade volume they have with other countries (more trade with Country X, then hold more of Country X's currency) plus some factor for stability/volatility/currency risk etc.
It literally says in the article that nothing is going to fully replace it. And the same way that it didn’t happen overnight for it to become the force that it’s today in the global economy, it won’t disappear overnight either.
America decided to politicize and weaponize the USD and so the rest of the world decided to reduce usage of USD in international trade. They can use currencies of their trade partners to trade, so that:
1. Currency flows are invisible to the Fed
2. US sanctions cannot ban mutual trade in other FX
these two are the major ones, so if Brazil wants to trade with China, they don't need to use USD, they can hold each other's FX as some reserve and use it for trade
Something I think a lot of people miss in this discussion is that with computers and electronic markets dealing with currency conversions is fairly easy. In the past doing everything in USD vastly simplified everything, but today I think countries just trading with whatever currency works for a given market or transaction probably makes the most sense.
There is no other world currency that looks both large and stable enough to replace USD. Chinese Yuan/Renminbi is probably the closest but it's probably viewed by many as too easily manipulated. It's a pure fiat currency run by a single party state with little separation of powers.
A global currency has to have liquidity and availability and the Renminbi has none of those things. China doesn't seem willing to turn their country into a major importer (thus making the RMB more global) so I doubt it will replace the USD either. Probably all three USD/EUR/RMB will be around without a major takeover by a new entrant.
Computers and electronic markets don't solve currency conversion so easily because it's not just about doing math.
If say a Thai company wants to buy cocoa beans from Nigeria, the Nigerian exporter doesn't have any immediate use for Thai baht if they aren't planning to buy something from Thailand. If exports and imports between two countries aren't relatively balanced there won't be a liquid market between their currencies.
What if countries form networks? If Nigeria has no use for Thai Baht they swap it with another country for US dollars, Euros, Rinminbi, whatever. It could all be done automatically in near real time.
So there's still an intermediate currency needed. Which is how it works right now. And the preferred intermediate currency when trading currencies with non-liquid markets is USD.[1]
It might be how it’s done now but I don’t see why that’s how it has to be done. It’s just math and database transactions. Not having a fixed intermediate does make things more complicated since it requires many-party transactions between floating currencies. But lots of math nerds with backgrounds in physics go into finance. I’m sure they can figure it out.
You could also create derivative instruments based on baskets of currencies and use those as intermediates.
My view is that the primary purpose of money is to enable balanced exchange of useful goods and services, and with that premise, "money" could be replaced by large information systems. In fact, that transition is long underway. Who uses cash anymore?
My guess is that initially it will get eaten away by parties that currently trade in US dollar for convenience shifting to trading directly in their native currencies. It's a pure cost / risk equation for them that they have to manage this third variable in their dealings and if that outweighs the benefits of using a common currency they will make an agreement to trade directly. This will happen slowly over a long time and eventually a new default currency will emerge as a result of these decisions.
By whom? If I wish to look up bitcoin exchange pricing, I look it up based on AUD. I wouldn't measure bitcoin in USD, that would hold no value to me or billions of others globally.
