Prophecies that the U.S. dollar will lose its status as the world’s dominant currency have echoed for decades—and are increasing in volume. Cryptocurrency enthusiasts claim that Bitcoin or other blockchain-based monetary units will replace the dollar. Foreign policy hawks warn that China’s renminbi poses a lethal threat to the greenback. And sound money zealots predict that mounting U.S. debt and inflation will surely erode the dollar’s value to the point of irrelevancy.
But contra the doomsayers, Paul Blusteinargues that the dollar’s standing atop the world’s currency pyramid is impregnable—barring a catastrophic misstep by the U.S. government. In his book King Dollar: The Past and Future of the World’s Dominant Currency, he notes the dollar’s supremacy stems from several factors—mainly, the unrivaled depth, breadth, and liquidity of U.S. financial markets, as well as America’s legal and regulatory infrastructure.
Although other currencies have similar features and are used internationally to some extent, none can match the dollar. All alternatives have drawbacks that limit their global role. What follows is the story of one such major currency—the Japanese yen—and why it failed to take the dollar’s throne.
Kaiseki dinners featuring multiple courses of delicacies, exquisitely presented on hand-crafted ceramics and lacquerware, served by kimono-clad waitresses, washed down with free-flowing sake and other alcoholic beverages, followed by karaoke sessions with geishas simpering over the singing performances—that was the sort of hospitality accorded U.S. Treasury officials who traveled to Tokyo in the 1980s for “yen-dollar talks.” Their hosts held senior positions in the powerful Ministry of Finance, which gave them entree to the capital’s most exclusive dining establishments and nightspots, all costs covered by Japanese government expense accounts.
For all the delights of their evening entertainment, however, the Americans generally found these visits frustrating. Their goal was to persuade Japan to internationalize the yen by removing heavy regulations over the nation’s financial system and allowing money to move freely in and out of the country. This point bears repeating to ensure that it sinks in: The U.S. government wanted to make the yen more like the dollar; Treasury officials were not only willing to countenance another currency playing a global role similar to that of the greenback, they were insisting on it.
But progress was glacial. Their Japanese counterparts were skilled at parrying U.S. proposals with painstaking explanations of why Tokyo couldn’t take the measures Washington wanted or why, if implementation were to proceed, it would have to go “step by step” over a number of years. It didn’t help that the negotiations were typically conducted in a stilted atmosphere, with each side sitting opposite the other at long tables while dozens of junior Finance Ministry officials hovered along the walls and in nearby rooms to provide their superiors with logistical support.
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U.S. impatience with Tokyo’s “step by step” approach was manifest at one session when Treasury Undersecretary Beryl Sprinkel, an ardent free marketeer with a stentorian voice, rejected the argument offered by the lead Japanese negotiator, Vice Minister Tomomitsu Oba. “I grew up in Missouri on a dirt farm,” boomed Sprinkel, who recalled that when piglets were born, “we had to cut their tails off. When we cut them off we didn’t cut them off one inch at a time! That would just hurt them more. We just hacked them off once up at the top and that was the end of it.” The translation, which took a few seconds to transmit, evoked shocked silence at first on the Japanese side of the table, until Oba laughed, which led to peals of laughter among his subordinates as well. The next day, Oba declared that he had understood Sprinkel’s story and henceforth Japan’s approach would change from “step by step” to “stride by stride.”
As the story suggests, U.S. officials, who were actively encouraging a competitor currency to assume some of the dollar’s international status, were up against a government that had no interest in mounting such a challenge. Japanese officials saw a low-profile yen as a crucial element in their nation’s postwar economic miracle, and they were loath to mess with success.
That miracle was then in full swing. Toyota, Nissan, and Honda had invaded the U.S. auto market in the 1970s and found it ripe for plucking; similar conquests had been achieved in consumer electronics by Sony and Matsushita Electric, in computers and integrated circuits by Fujitsu and NEC, in power generation and heavy machinery by Toshiba and Hitachi, and by other ultra-competitive Japanese firms in a host of sectors ranging from steel to construction equipment to machine tools. Books with titles such as Japan is Number One and Trading Places: How We Allowed Japan to Take the Lead explained to Americans how this resource-poor island nation, having rocketed to second place in the world’s GDP rankings and accumulated the world’s biggest stash of foreign exchange reserves, was on course to challenge the United States as the dominant economic power.
To attain such supercharged growth, Japanese policy makers had adopted a development model based on what economists call “financial repression,” the idea being to use the financial system for the benefit of the nation’s manufacturers and exporters. In the first quarter century after the war, these policies were draconian, with dollars and other foreign currencies carefully husbanded for allocation by bureaucrats to obtain machinery, technology, and other inputs from abroad needed to build industrial strength. So tight were restrictions on cross-border money movements during this period that as late as 1970, almost no Japanese trade was invoiced in yen. These regulations were loosened somewhat in subsequent years, but even in the 1980s, Japanese banks and savers were strictly limited in the amounts of money they could send abroad; government planners wanted a big pool of capital kept at home so that industrial firms could obtain the maximum amount of funding at the lowest possible interest rates. Another facet of this policy involved discouraging foreigners from buying yen in unlimited quantities lest that cause the exchange rate to rise, which would render Japanese goods less competitive on world markets.
Washington’s tolerance for these policies was at an end by the 1980s. U.S. manufacturers were in a lather about the handicap they faced as a result of the dollar’s strength vis-a-vis the yen. Moreover, American banks, securities firms, and money managers were clamoring for access to Japan’s protected financial markets. Under heavy U.S. pressure to shift away from its mercantilist practices, Tokyo agreed to a yen-dollar pact in 1984 that liberalized its financial system somewhat, and during the 1980s the percentage of Japanese exports denominated in yen rose from less than 30% at the beginning of the decade to nearly 40% by 1991. The yen-dollar deal was followed in 1985 by the Plaza Accord, which explicitly called for the yen to rise against the greenback
Although those agreements helped address U.S. grievances, Japan’s economic muscularity only grew more formidable than before. To counter the effects of endaka (yen appreciation) on exports, the Bank of Japan cut interest rates to historically low levels, which drove prices on the Tokyo Stock Exchange and property in major Japanese cities to stratospheric heights. Japanese multinationals adroitly coped with soaring costs at home by shifting much of their labor-intensive manufacturing overseas—to North America and Europe, where their customers were; and to East and Southeast Asia, where they could export their premium-branded goods from low-cost production bases. This process firmly entrenched Japan as the top trading partner and foreign investor for most of its Asian neighbors, giving Tokyo a degree of influence that Japanophobes found disconcerting. One oft-cited piece of evidence was how the 17,000 workers at Matsushita’s Malaysian plants donned Matsushita uniforms and started their days with the company song and calisthenics, just as employees did at Matsushita’s Osaka headquarters. “Japan has established a presence in the region so rapidly that talk of a ‘coprosperity sphere’ is already a cliché,” reported Newsweek in an August 1991 cover story which was titled “Sayonara, America” and lamented that U.S. companies were falling far behind amid an unprecedented burst of dynamism. “This year, for the first time since the Organization for Economic Cooperation and Development began keeping statistics, the Asian nations of Japan’s yen bloc will generate more real economic growth than either the European Community or the combined economies of North America.”
That phrase—”yen bloc”—was widely bandied about, referring sometimes to a trade zone that Tokyo would presumably control but also to the prospect that the Japanese currency, liberated from the shackles of financial repression, would dominate Asia to America’s detriment. The yen’s share of reserves in East Asia topped 17% by 1990, and the borrowing of yen surpassed the borrowing of dollars by those in Asia seeking foreign credit during this period. In 1995, in her Foreign Affairs article “The Fall of the Dollar Order,” Yale diplomatic historian Diane Kunz foresaw grave consequences: “As the yen area solidifies and the yen becomes the common Pacific currency, Americans will need to sell dollars for yen to conduct business with any Asian nation,” she wrote. “The death of the dollar order will drastically increase the price of the American dream while simultaneously shattering American global influence.” Later that year in another Foreign Affairs article, titled “Dominance through Technology: Is Japan Creating a Yen Bloc in Southeast Asia?,” Price Waterhouse consultant Mark Taylor warned that “U.S. firms may soon find themselves excluded from a Japan-centered regional economic bloc.”
This ballyhoo about the yen was poorly timed. By the mid-1990s the Japanese economy was mired in deflation following the bursting of its stock and property bubble. Among the authorities’ many desperate efforts to revitalize the economy was a “Big Bang” reform package in 1996 ending all remaining capital controls and including other steps aimed at turning Tokyo into a financial hub, much as London had done a decade earlier. But Japan could not overcome its legacy of financial repression. The nation’s banks, accustomed to being cosseted by the Finance Ministry, were saddled with bubble-era loans that neither they nor their powerful regulators wanted to recognize as unpayable. Seeing the banking industry struggling to stay afloat, foreign financial firms downsized their Tokyo operations and headed for other, more vibrant centers of Asian finance such as Hong Kong, Singapore, and Shanghai.
Even after further liberalization policies were adopted in 1999, the yen remained a distant also-ran as an international currency. It accounted for 5.5% of foreign exchange reserves in 2001, declining by 2016 to around 3%, and played a modest part even in Japan’s own trade, where it was used in only about 37% of Japanese exports and 26% of imports. Although Japan enjoys enviable wealth, its growth has remained anemic, stunted by a rapidly aging society and dwindling population, so its gravitational pull has never again come close to that which it exuded during the 1980s. The Bank of Japan has bought such vast quantities of the government’s bonds in its effort to stave off deflation that there has been very little trading in those bonds in recent years—yet another reason for the yen’s relatively low ranking in the currency league tables.
Perhaps if Finance Ministry officials had taken the moral of Beryl Sprinkel’s piglet story to heart and dismantled their controls much earlier, dollar users would have had strong motivation to shift to yen. But the opportunity was missed.
Elon Musk’s Friday visit to the Pentagon drew criticism and highlighted his companies’ links to both the federal government and China. The billionaire’s rocket company SpaceX has $22 billion in contracts with the federal government. In China, Musk’s Tesla operates its biggest factory, Gigafactory Shanghai, which as of last year produced about half of all Tesla vehicles.
Elon Musk visited the Pentagon Friday for a briefing on China which underscored the billionaire’s steadily growing influence in the Trump administration as well as his businesses’ deep ties to both the federal government and China.
Musk was originally meant to receive a briefing on top-secret information related to a potential war with China, The New York Timesreported, although defense officials later said he would receive an unclassified briefing, according to the Wall Street Journal. The Defense Secretary Pete Hegseth and President Trump have both denied that Musk visited the Pentagon to receive top-secret information on a possible war with China, as was reported by the Times prior to Musk’s visit Friday.
Before reporters in the Oval Office, Trump noted that Musk would not see top-secret information on a potential war with China, and mentioned that the billionaire’s businesses could play a role.
“We don’t want to have a potential war with China, but I can tell you if we did, we’re very well-equipped to handle it, but I don’t want to show that to anybody but certainly you wouldn’t show it to a businessman,” Trump said. “Elon has businesses in China and he would be susceptible perhaps to that.”
Whatever information he received (he replied “Why should I tell you?” to a reporter’s question about the subject of the meeting), the potential high-level nature of his Pentagon visit has drawn scrutiny.
Sen. Kirsten Gillibrand (D-N.Y.), who is also a senior member of the Senate’s Armed Services Committee, wrote in a post that Musk should not have been at the Pentagon.
“Elon Musk is an unelected, self-interested billionaire with no business anywhere near the Pentagon,” Gillibrand wrote in a post on X.
It’s unclear whether other defense companies would file lawsuits based on Musk’s access, but even if they do it’s doubtful they would prevail in court, said Case Western Reserve University law professor Anat Alon-Beck.
“Nobody’s promised equal access to that type of information,” Alon-Beck told Fortune. “We’ve always had people—with the previous administrations as well—having access versus others who don’t. So it’s not just about Musk.”
Still, Musk’s businesses have deep ties to China. His EV maker Tesla has been selling vehicles in the country for a decade and Musk has often spoken positively about the country. In 2023, during an audio interview with U.S. lawmakers on his social media network X, the CEO said he was “pro-China.”
“I have some vested interests in China but honestly, I think China is underrated and I think the people of China are really awesome and there’s a lot of positive energy there,” he said at the time.
Among his “vested interests” and involvements with China are the following:
Tesla’s biggest factory, Gigafactory Shanghai, is located in China. Half of Tesla’s vehicles globally were made there as of last year.
Despite a recent 49% drop in deliveries, China is still one of Tesla’s biggest markets behind the U.S.
The Chinese government has reportedly “sought assurances” that Musk would not sell Starlink in China, the Financial Times reported. Musk last year told companies making Starlink components in Taiwan to move manufacturing to other countries because of “geopolitical concerns.”
In the U.S., SpaceX is a major government contractor with about $22 billion in government contracts, according to its CEO. Its subsidiary, Starlink, helps the Pentagon provide internet access in remote environments.
Tesla, for its part, has received $11.4 billion in regulatory credits from federal and state governments, according to a Washington Postanalysis. Cumulatively, Musk’s companies have received $38 billion worth of government contracts, loans, subsidies, and tax credits going back 20 years, the Post reported.
With Congress just passing the federal budget, lawmakers will have an opportunity to tackle long-term financial challenges outside of crisis mode. One such challenge—and opportunity—is the rise of stablecoins: privately issued digital tokens pegged to fiat currencies like the U.S. dollar. Stablecoins have rapidly grown into a hundreds-of-billions market, facilitating billions in transactions, but they’ve lacked a comprehensive U.S. regulatory framework. Fortunately, Washington is signaling new openness to digital assets—evidenced by President Trump announcing the establishment of a strategic digital asset reserve for the nation. Creating the requisite clarity will unlock a new era of competition and innovation among banks.
Stablecoins are a strategic extension of U.S. monetary influence. Around 99% of stablecoin volume today is tied to the U.S. dollar, exporting dollar utility onto international, decentralized blockchain networks. A stablecoin market with the right guardrails can strengthen the U.S. dollar’s dominance in global finance. If people around the world can easily hold and transact in tokenized dollars, the dollar remains the go-to currency even in a digitizing economy. Recent congressional hearings echo this point—up to $5 trillion in assets could move into stablecoins and digital money by 2030, up from roughly $200 billion now. If the U.S. fails to act, it risks “becoming the rust belt of the financial industry,” as one fintech CEO warned.
Other jurisdictions aren’t standing still: Europe, the U.K., Japan, Singapore, and the UAE are developing stablecoin frameworks. Some of these could even allow new dollar-pegged tokens issued offshore—potentially eroding U.S. oversight. In short, America must lead on stablecoins or get pressured by Europe’s Digital Euro and other central bank digital currencies (CBDCs) that threaten both the private banking ecosystem and individual sovereignty in their strictest form. My research, for example, shows that CBDCs to date have not had any positive effects on growing GDP or reducing inflation, but have had negative effects on individuals’ financial well-being.
Ideally, various regulated institutions—banks, trust companies, fintech startups—could issue “tokenized dollars” under a common set of rules. Before the 1900s, state governments had the primary authority over banking. While that led to fragmentation and problems, with the right federal architecture, blockchain allows banks to offer differentiated products and a version of what existed pre-1900—their own type of stablecoin that differs in security, yield, and/or other amenities—while still keeping the value pegged to the dollar. More broadly, there is a large body of academic research showing how stablecoins drive down transaction costs, speed up settlement times, and broaden financial inclusion through new services.
In absence of federal action, we risk a patchwork of state-by-state rules or even de facto regulation by enforcement, which creates uncertainty for entrepreneurs and consumers alike. The Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act was introduced in the House in 2020, requiring any company issuing a stablecoin to obtain a bank charter and abide by bank regulations, including approval from the Federal Reserve and FDIC before launching a stablecoin, and to hold FDIC insurance or Federal Reserve deposits as reserves, making stablecoin issuers regulated like banks to protect consumers and the monetary system.
However, as House Financial Services Committee Chairman French Hill has said, the goal should be to modernize payments and promote financial access without government overreach. Notably, Hill contrasted private-sector stablecoin innovation with the alternative “competing vision” of a government-run digital dollar (central bank digital currency) that could crowd out private innovation. And, the STABLE Act could be too draconian, penalizing non-bank entities. To that end, the recent bipartisan effort in the Senate—the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act)—has gained momentum.
In practice, the GENUIS Act could allow a regulated fintech or trust company to issue a dollar stablecoin under state supervision, so long as it complies with stringent requirements mirroring federal bank-like rules on liquidity and risk. This kind of flexibility, paired with robust standards, can prevent market fragmentation by bringing all credible stablecoin issuers under a regulatory “big tent.” It would also prevent any single point of failure: If one issuer falters, others operating under the same framework can pick up the slack, keeping the system stable.
Critics often voice concerns that digital currencies could enable illicit activity. But in reality, blockchain technology offers more transparency, not less, when properly leveraged. Every transaction on a public blockchain is recorded on an immutable ledger. Law enforcement has successfully traced and busted criminal networks by following the on-chain trail—something much harder to do with cash stuffed in duffel bags. In fact, blockchain’s decentralized ledger offers the potential for even greater transparency, security, and efficiency.
Following the momentum from the White House, Congress has a running start on crafting rules that bring stability and clarity to this market now that the budget has passed. Lawmakers should refine and pass a comprehensive stablecoin bill that incorporates the best of both approaches—the prudential rigor of the bank-centric model and the innovation-friendly flexibility of a dual license system. Done right, stablecoin legislation will reinforce the dollar’s role as the bedrock of global finance in the digital age, unlock new fintech innovation and competition domestically, and enhance financial integrity.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Hundreds of people lined up Friday morning at three sites in New York City, some arriving more than an hour early, for the opportunity to snag one of the nation’s hottest commodities: a dozen free eggs.
People were bundled up against the windy cold as they stood outside a Harlem restaurant, patiently waiting to be handed a carton. Less than 10 minutes later, the 100 cartons were gone, leaving many empty-handed.
“I heard from the news that they will be giving around, like, 1,500 eggs, or something like that. OK? And I just came because I needed some eggs, and then I’m waiting here in the line, and I don’t see anything,” said Jackeline Tejava, who was in a line that stretched around the block. “They say that the eggs are gone, but it hasn’t been not even more than 20 people, so I don’t know what happened.”
Egg prices hit a record high last month as the U.S. contends with a bird flu outbreak, which has forced poultry farms to slaughter more than 168 million birds since 2022.
Trying to find eggs on grocery store shelves in New York City can be hit or miss. When they are in stock, they can be pricey.
Friday’s giveaway was organized by FarmerJawn, a 128-acre (52-hectare) Pennsylvania farm that’s focused on providing organic food to underserved communities. FarmerJawn held other egg giveaways Friday in Brooklyn and Queens. The group also handed out free cartons in New York last month.
“We’re doing this egg giveaway because, as food producers, we believe it’s our responsibility to support the communities that support us,” the group said in a written statement. It partnered with a local butchery and a upstate New York farm to organize Friday’s events.
“Food is medicine, and everyone – especially the often-forgotten middle class – deserves access to it,” Farmerjawn said.
Other organizations, including churches, have recently held egg giveaways in New York and elsewhere around the country, including Las Vegas, Chicago, Philadelphia and Richland County, South Carolina.
The U.S. Department of Agriculture expects egg prices to rise 41% this year over last year’s average of $3.17 per dozen. A carton of eggs in New York City can often run twice or three times that amount, depending on the store.
Marion Johnson, who waited more than two hours at the Harlem giveaway but didn’t get a free carton, said she can’t afford eggs.
“They’re so expensive,” she said. “This is not fair. … They know everybody gonna be on line like this.”
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