Archive · 18 Jan 2026
Dollar Supremacy Threatened by Fed Turmoil and Yuan Push
The dollar has been the world's most important currency for a long time.
But now, there are two big things happening that might change that.
First, there's a big investigation into the head of the U.S. Federal Reserve, which some people think could make investors worry about the U.S. financial system.
Second, China is trying to make its own currency, the yuan, more important around the world.
China is doing this by making it easier for countries to use the yuan for payments and loans.
Some people think this could make the dollar less important, but others say the dollar is still too strong to be replaced anytime soon.
The investigation into the Fed and China's push for the yuan are making people think about whether the dollar will stay the world's most important currency.
A criminal investigation into Fed Chair Jerome Powell is raising concerns about the stability of the U.S. financial system and the dollar's supremacy.
China is expanding the use of the yuan globally, creating alternatives to the dollar-dominated financial system.
The dollar's dominance is being challenged by China's Swift-like payments system, CIPS, which has seen increased usage since the war in Ukraine.
China is promoting yuan-denominated bonds and loans to developing countries, furthering the yuan's global influence.
Despite these challenges, the dollar remains the most widely used currency in global payments and trade finance.
- Who
- Global economists, China, and the Trump administration
- What
- Threats to dollar supremacy due to Fed turmoil and China's push for the yuan
- When
- Ongoing, with recent developments in 2026
- Where
- Global financial markets, particularly the U.S. and China
- Why
- Due to the criminal investigation into Fed Chair Jerome Powell and China's efforts to globalize the yuan
- Investigation
- Criminal investigation into Fed Chair Jerome Powell
- China's Currency Push
- Expanding use of the yuan globally
- Dollar's Role
- 47% of payments using the Swift network, 80% of trade finance
- Yuan's Role
- 3% of payments using the Swift network, 8% of trade finance
- CIPS Growth
- Nearly doubled its daily transaction volume and value since the war in Ukraine
- Yuan-Denominated Bonds
- Growing market for yuan-denominated assets
- China's Lending
- 45% of overseas lending by Chinese financial institutions in yuan