European Central Bank Chief Unveils Dollar Replacement Strategy

5th June 2025

We are honored to welcome Christine Lagarde, President of the European Central Bank, for a keynote address in Berlin on Europe's role in a fragmented world.

Coming shortly after the formation of Germany's new government, this timely speech will provide insightful perspectives on the future of Europe's economic leadership.

Amidst a fragmenting global landscape and mounting geoeconomic pressures, the European Union faces urgent challenges: How can it strengthen its competitiveness and build up economic sovereignty while helping to maintain openness and predictability in global economic relations? And what role can the Franco-German partnership play in steering Europe through this new era?

This video is part of a much longer speech.

The full speech of Christine Lagarde can be seen at https://www.youtube.com/watch?v=i1HYLxZoUGM&t=397s

Note Bretton Woods agreement mentioned
The Bretton Woods Conference, held in July 1944 at the Mount Washington Hotel in Bretton Woods, New Hampshire, established a new international monetary system and created the International Monetary Fund (IMF) and the World Bank. This system, designed to foster economic stability and cooperation, was a key post-war agreement aimed at preventing future economic crises.

Key aspects of the Bretton Woods system include:
Fixed Exchange Rates:
Countries agreed to peg their currencies to the U.S. dollar, which in turn was fixed to gold at a rate of $35 per ounce.
IMF and World Bank:

The IMF was established to monitor exchange rates, provide loans to countries with balance of payments difficulties, and promote international monetary cooperation. The World Bank was designed to provide loans for reconstruction and development projects.
Goal of Convertibility:

While there were initial delays, the agreement aimed for countries to make their currencies convertible for trade-related transactions.
Preventing Competitive Devaluations:

The system aimed to prevent countries from artificially devaluing their currencies to gain a trade advantage, which had been a feature of the pre-war period.

The Bretton Woods system lasted until 1971 when President Nixon ended the dollar's convertibility to gold. This marked the end of the fixed exchange rate system and the beginning of a floating exchange rate regime. The system, while successful in its initial goals of promoting stability and trade, ultimately faced challenges that led to its collapse.

Which currency will replace the U.S. dollar?
Euro. The euro is often seen as the most natural rival to the dollar due to the Eurozone's large economy, political stability, and the European Central Bank's credibility.2

What is the dollar reserve in the UK?
Foreign Exchange Reserves in the United Kingdom increased to 188056 USD Million in February from 186435 USD Million in January of 2025.

Reserve currency