Very good points! Reserve currency is a generic term and the USD is just a currency -- but its dominance on the global scene effectively makes it the reserve currency. It's not just about the stockpile -- banks estimate that nearly 90% of FX transactions involve the USD. (88% - from Federal Reserve https://www.federalreserve.gov/econres/notes/feds-notes/the-international-role-of-the-us-dollar-post-covid-edition-20230623.html and BIS https://www.bis.org/publ/qtrpdf/r_qt2212x.htm )
I don't disagree with your views on Russia and China. The U.S. GDP might be more robust in its data collection, but our economy benefits from generous valuations of intangible assets. . Some of our GDP's biggest contributors (the FAANG companies -- Facebook [now Meta], Apple, Amazon, Netflix, Google [now alphabet]) are almost entirely valued by their intangible assets -- and only time will tell how accurate these valuations were. Intangible assets are more resilient against financial tools like interest rates, which gives us an advantage over economies who focus on tangible assets. Not to mention our fractional reserve banking system spiraling out of control 3 times in 30 years because it couldn't keep up with its own fictitious capital.
GDP is helpful in an increasingly limited sense to provide a picture of healthy economies. U.S. GDP has looked healthy recently -- but the percentage of people homeless and living paycheck to paycheck would suggest otherwise about our economy.
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It's true that digital currencies aren't yet money themselves yet. But they offer a new intermediary for transactions to bypass the USD. The UAE and China, for example, just recently used a digital currency to facilitate an international transaction https://watcher.guru/news/brics-uae-pays-china-new-digital-dirham-ditches-us-dollar.
Sure, it will be a long time before we're paying bills in digital currency -- but this digital dollar can go straight into DH or RMB.
It's also true that central banks have been lowering their reserve of the USD to grow their stockpile of other currencies -- and this has been happening since the 1990's so it's not entirely new.
Plus the US GDP as a % of global GDP (GWP) has been decreasing in recent decades and is expected to continue that trend.
A question we're then faced with is: as USD continues to shrink in %FX reserve currency and in %GWP, will we see the USD shrink as a %FX transactions?
I certainly don't want a single board of bankers controlling all the world's money. I can't yet figure out if we have the capacity to mediate commerce with a mixture of currencies, or if another player is going for the top spot.
