In July 1944, with the war not yet won, 730 delegates from 44 Allied nations met for three weeks at the Mount Washington Hotel in Bretton Woods, New Hampshire, to design the postwar international monetary system. The British negotiator was John Maynard Keynes, who arrived proposing a supranational currency he called the bancor; the American was Harry Dexter White, who held the only chips that mattered — the United States then owned roughly two-thirds of the world's monetary gold. White won. The system that emerged pegged every major currency to the US dollar and pegged the dollar to gold at $35 an ounce, and built the IMF and the World Bank to police it. The dollar became the world's reserve currency, and has remained so for more than eighty years.
The peg to gold lasted until August 1971, when Nixon — facing inflation, a collapsing trade surplus, and foreign claims on Fort Knox that far exceeded the gold inside it — closed the gold window. What was supposed to be the end of the dollar's reign turned out to be the beginning of its real reign. Without the gold constraint, the United States could run trade deficits indefinitely, financing them by issuing dollars that the rest of the world wanted to hold. The 1974 petrodollar understanding with Saudi Arabia priced oil in dollars; trade between third countries was settled in dollars; the world's safest asset became the US Treasury bond. This exorbitant privilege, as French finance minister Valéry Giscard d'Estaing called it in the 1960s, has let the United States borrow more cheaply than any other major economy, absorb the world's surplus savings (Asia's reserves recycled into Treasuries), and — most consequentially in the 21st century — weaponize the dollar through sanctions that lock targeted states out of the dollar-clearing system. Roughly 60 percent of global central-bank reserves and nearly half of all cross-border payments still run in dollars, decades after the gold that once backed them vanished.
Every decade announces the dollar's decline; every decade the dollar disappoints the announcers. The current contest — can the BRICS, the renminbi, gold, or cryptocurrency build an alternative settlement layer fast enough to matter? — is the most concrete frontier of the multipolar economic order. The 2022 freezing of Russia's $300 billion in reserves taught every non-aligned central bank that dollar assets are revocable, accelerating record gold-buying and bilateral local-currency deals. Yet no rival offers Treasuries' depth, liquidity, and legal certainty. The dollar is, at the moment, both more dominant than ever and more contested than ever.