New Delhi, May 8: A bipartisan group of U.S. senators has reintroduced a proposal to reaffirm the American dollar’s status as the world’s reserve currency. They have raised alarms over China’s efforts to establish a parallel global financial system centered around the yuan.
Senators Ted Budd and Jeanne Shaheen stated that Beijing’s attempts to internationalize the yuan pose economic and national security risks to the U.S. and its allies.
In a statement accompanying the proposal, Budd emphasized, “The ongoing cooperation and success in international trade depend on the American dollar maintaining its status as the global reserve currency.”
He warned that allowing China to enhance global currency flow and create an alternative financial infrastructure would be a policy failure, potentially dividing the world economy and threatening free market growth, especially in developing nations.
Budd asserted that the U.S. dollar must continue to play a stabilizing role in international markets.
Shaheen added that the dollar’s dominance is directly linked to American economic strength and global influence. “Maintaining the U.S. dollar as the global reserve currency is essential not only for the long-term stability and prosperity of the American economy but also for safeguarding national security,” she said.
She criticized recent U.S. economic instability, stating, “America’s reputation as a reliable economic partner has been affected by erratic tariff rollouts and self-imposed instability. It is crucial for Congress to demonstrate that the U.S. is prepared to remain a key player in the global financial system.”
The proposal highlights concerns regarding China’s long-term campaign to undermine the dollar’s dominance and expand its influence in the developing world.
Data from the International Monetary Fund (IMF) indicates that the dollar’s share of global currency reserves fell from approximately 71% in 1999 to 56.82% by the third quarter of 2025, while the yuan’s share was only 1.93% during the same period.
The lawmakers also accused China of maintaining a non-market, fixed exchange rate, which keeps the yuan undervalued and creates trade imbalances.
They pointed to China’s Belt and Road Initiative, claiming it has increased dependency on Chinese capital in developing countries. Since 2013, Beijing has invested over $1 trillion globally under this initiative.
The senators also emphasized China’s efforts in digital currency systems and cross-border payment infrastructure. The proposal noted that over 1,700 banks have subscribed to China’s Cross-Border Interbank Payment System (CIPS), which it promotes as an alternative to the SWIFT financial messaging system.
The measure warns that any crisis related to Taiwan or disruptions in Indo-Pacific shipping lanes could weaken Western influence due to China’s attempts to build a parallel financial system.
The proposal calls for the U.S. to strengthen economic ties with key regions and collaborate with allies to promote growth and stability in developing countries while countering Beijing’s financial influence.
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My name is Narendra Jijhontiya. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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