Many that are now king will fall, Many that are fallen will rise.
How does a currency become the reserve currency on which the globe trades? When the world faces uncertainty and a major global event establishes a new economic power. World war 2 ended the British Empire’s economic might and made USA the world leader in both economic and military terms. After the Bretton Woods agreement of 1944, it was established that currency of different countries will be pegged with USD and the USD itself will be pegged to GOLD. However, in 1971, the United States, under President Nixon, suspended the convertibility of the U.S. dollar to gold, effectively ending the Bretton Woods system. This was primarily driven by increasing US inflation, a trade imbalance, and the increasing pressure from other countries to redeem dollars for gold, which was straining US gold reserves. After this change the US government started printing the dollar recklessly to pay for interests on the growing debt. In 1971, the US debt was 0.35 Trillion dollar which ballooned to 35 Trillion by 2024. This ever mounting debt is a big strain on the US treasury.
Above currencies where once backed by some of the strongest empires of the past. All these countries where biggest economies at one time ,but then they faced financial crisis where they printed large amount of money just to service the interest taken on debt and had to face an internal/external revolution and ultimately had to cede power to the next big empire.
The above chart shows the cycle by which a country passes from emerging as a dominant global force to eventually ceding power to a new leader.
We are in the midst of a changing world order. The world has shifted from the US hegemony to a duopoly of China and USA. The starting signs of this change are now visible. There are many things that are new to the current situation, like the ubiquitous connectivity of social media and internet, the closed governance system of China. But, we must remember that history does not repeat ,it rhymes.