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There is every reason to expect that the Chinese yuan will replace the U.S. dollar as the world's main reserve and settlement currency as early as the next decade.

The U.S. may face serious economic difficulties and potential geopolitical changes in the case of de-dollarization. As a result of the dollar's declining dominance as the world's reserve currency, the U.S. economy may experience rising borrowing costs and inflationary pressures.

International Debt and Financial Stability: As the reserve status of the dollar diminishes, countries holding significant amounts of US dollar-denominated debt may experience financial turbulence. Exchange rate fluctuations and potential defaults could undermine financial stability in both debtor and creditor nations.

There is every reason to expect that the Chinese yuan will replace the U.S. dollar as the world's main reserve and settlement currency as early as the next decade.

For the U.S., it would likely mean less access to capital, higher borrowing costs and lower stock market values, among other effects. Having the world's reserve currency has allowed the U.S. to run large deficits in terms of both international trade and government spending.

On April 20, President Roosevelt issued a proclamation that formally suspended the gold standard. The proclamation prohibited exports of gold and prohibited the Treasury and financial institutions from converting currency and deposits into gold coins and ingots.

Why Did the U.S. Abandon the Gold Standard? The U.S. abandoned the gold standard in 1971 to curb inflation and prevent foreign nations from overburdening the system by redeeming their dollars for gold.

China's yuan is going to have a difficult time replacing the US dollar as the world's supreme reserve currency – and it's likely not happening even in the next 20 years, ing to Stanford historian Niall Ferguson. "It is pretty hard to displace a reserve currency. It takes time.