Prior to Bretton Woods countries were well aware that no single country could be entrusted with the power granted in being the global reserve currency. It's too much power that's too tempting to abuse. But they also learned from the collapse of Bretton Woods that even orchestrated agreements with built-in penalties just don't work, because countries can simply ignore them when beneficial.

So I think we're headed to a future where no currency will dominate. This is probably also why the dollar's decline doesn't have any clear successor filling the vacuum. If anything, countries are accumulating far larger stores of gold. I expect this is also why BRICS is having difficulty creating their own trading currency. No countries can, or should, trust other ones which complicates matters greatly.

No, and I dont think China wants the Yuan to be the reserve currency. But this is a good step in allowing better currency trading/exchange. Which can make imports between the EU and China cheaper.

Exactly. It's always been posturing.

what’s stopping China from dropping currency controls in a ab afternoon? It’s not like this is some force of nature.

The yuan doesn't need to become a reserve currency for it to impact the US dollar. 15%+ of global trade is Chinese import/export. China is the biggest buyer and seller to most countries.

>> The yuan will never become a reserve currency as long as China maintain tight currency controls around importing and exporting it. It's very difficult to (legally) send CNY out or China.

Did you read the article? It seems that may be changing.

Does the world still require a reserve currency? Spreading risk across the Dollar, Yuan, and Euros seems more logical. While the hurdles and friction associated with foreign exchange (FX) and international transfers were significant when reserve currencies were crucial, they are not as big an issue today.

> The euro is in a much better position to be adopted as an alternative, but its share of global reserves has been flat at around 20% for years.

The Euro is only 25 years old: it would be pure folly to make the "reserve currency" something that recent.

Then... One country of the eurozone already partially defaulted on its public debt (Greece, in 2015). And France is running an insane deficit: so bad that there are now talks of the International Monetary Fund taking control of France's public finances. France had to raise the yield on its debt to its highest level since nearly 20 years. France cannot reach the "only 5% of GDP" in yearly public deficit, on top of an already insane public debt: it is snowballing and the only outcomes are going to be miserable for the people (and for the EUR).

An economist, before the EUR began circulating, explained by which mechanisms the EUR would lead to Spain, Greece and then France default on their public debts. That economist explained how the EUR would lead to "too many secondary houses in Spain" and "too many public servants in France". When Greece did default on its debt, that economist said: "I was only wrong on the order on which these countries would default".

One would be crazy to make a reserve currency a currency that's a mix up of countries that have different productivity and different fiscal laws.

The EUR is one of the worst currency ever conceived and it could turn out to also be one of the shortest lived currency.