The single most astonishing fact about foreign exchange is not the high volume of transactions, as incredible as that growth has been. Nor is it the volatility of currency rates, as wild as the markets are these days.

Instead, it's the extent to which the market remains dollar-centric.

Consider this: When a South Korean wine wholesaler wants to import Chilean cabernet, the Korean importer buys U.S. dollars, not pesos, with which to pay the Chilean exporter. Indeed, the dollar is virtually the exclusive vehicle for foreign-exchange transactions between Chile and Korea, despite the fact that less than 20% of the merchandise trade of both countries is with the U.S.

Chile and Korea are hardly an anomaly: Fully 85% of foreign-exchange transactions world-wide are trades of other currencies for dollars. What's more, what is true of foreign-exchange transactions is true of other international business. The Organization of Petroleum Exporting Countries sets the price of oil in dollars. The dollar is the currency of denomination of half of all international debt securities. More than 60% of the foreign reserves of central banks and governments are in dollars.

The greenback, in other words, is not just America's currency. It's the world's.

But as astonishing as that is, what may be even more astonishing is this: The dollar's reign is coming to an end.

I believe that over the next 10 years, we're going to see a profound shift toward a world in which several currencies compete for dominance.

David Fuller's view No disrespect to Mr Eichengreen but when an article like this appears it is often a contrary indicator for at least the short term. Note some welcome respite in the US Dollar Index's recent downtrend (weekly & daily).

On a very long-term basis, I think that Mr Eichengreen's view is correct, but changes in currency reserve status take place at a glacial pace. Many voices, including Fullermoney's, feel that the USA has abused its position as custodian of the world's main reserve currency. However this does not mean that the status quo will change anytime soon because you may have noticed a paucity of countries or currency blocks queuing up to take over.

Remember when the euro was fancied as the future reserve currency?

Fullermoney maintains that China's renminbi will eventually replace the US dollar as the world's reserve currency, but not for a very long time. First, the renminbi will have to prove itself over time as a freely traded currency. Today, it remains a controlled unit of exchange which is not widely convertible.

Also, China's GDP will have to exceed that of the USA before a convertible renminbi is widely regarded as a natural replacement for the greenback as the world's main reserve currency. China's economy is likely to overhaul the USA's within the next 20 years but primary reserve currency status will not be handed over like a baton or by any official decree. Instead, I think it will occur very gradually over many years, probably around the middle of this century.