The Role of the Dollar: from Global Reserve to Future Uncertainties

The U.S. dollar has served as the global reserve currency since the half of 20th century, deepdly influencing international trade, finance, and geopolitical relationships. This thesis examines the evolution of the dollar trough its historical rise, current role, and future challenges. It is divided in 3 main parts where each one has its own tematic. Part I explores how the dollar ascended to dominance following World War II. in This part is concentrated in some economic events with an historical narrative particularly through the Bretton Woods Agreement and the subsequent establishment of the petrodollar system further cemented the dollar’s role in international markets, particularly in commodities like oil, thereby reinforcing its status as the world's leading currency. Part II assesses the contemporary pressures on the dollar. It investigates the efforts of rising economic powers, especially China and the BRICS nations, to reduce their dependency on the dollar by developing alternative trade and financial systems. China’s Belt and Road Initiative, particularly in emerging markets. Moreover, the thesis explores the growing role of digital currencies such as Bitcoin, which some see as potential threats to traditional fiat currencies. The impact of significant global events, such as the COVID-19 pandemic and the ongoing war in Ukraine, is also considered, specifically in terms of how they have affected the dollar's dominance. Part III looks to the future and suggest to study the past to understand the future, analyzing the critical factors that may influence the dollar’s continued global leadership. Additionally, the thesis examines external threats, such as geopolitical tensions, that could accelerate efforts by other countries to reduce reliance on the dollar.Ultimately, this thesis argues that while the dollar remains a central pillar of the global economy, its future is far from guaranteed. The U.S.'s ability to adapt to both domestic and international shifts will determine whether the dollar continues to dominate or gradually declines in influence