The most effective weapon in America's tussle with strategic and economic competitors may be 100 U.S. cents.
Countries like Russia and China chafe at the dollar's dominance, but there’s little they can do other than posture and make relatively benign adjustments to their monetary arrangements. Russian President Vladimir Putin acknowledged as much recently, telling journalists that "we don’t want to do away with it, because it’s a universal currency.” China's campaign to internationalize the yuan, which received backing from the International Monetary Fund in 2016, is going nowhere fast.
Putin spoke after Russia's oil fund said it will eliminate holdings of dollars and shift them into euros, gold and the yuan. The transfers will take place within the central bank's reserves and there was little impact on markets. The backdrop to all this is Russia’s objection to sanctions that Washington has applied since Putin annexed the Crimean peninsula from Ukraine in 2014.