Name: Fiona Marie T.

Jaucian Course and Block: BSA-1C

ASSIGNMENT

1. How possible that the dollar be replaced by another medium of exchange in

the international business transaction?

Thanks to its pivotal role in worldwide finance and trade, the U.S. dollar's

established dominance as the primary medium of exchange is unlikely to be

overturned soon. This is because of multiple aspects: its status as a reserve

currency, its financial market's profoundness and liquidity, its prevalent use in

trade settlements, the network effects created by it, and the trust in the

American economy. This network effect makes competition extremely

challenging for other currencies. Despite the challenges posed by the dollar's

stability, currency diversification efforts continue in the global market.

However, it seems unlikely that any currency will surpass its entrenched

position in the foreseeable future.

2. If so, what is the alternative or alternatives?

Various contenders are on the horizon that could potentially change the U.S.

dollar as the primary medium of exchange in international business. These are

the rise of euros, the growing adoption of the yuan, the emergence of digital

currencies, the usage of SDRs, and the establishment of regional currencies.

However, a gradual and complex process would most likely be required for any

replacement, considering significant geopolitical and economic

transformations.
Name: Fiona Marie T. Jaucian Course and Block: BSA-1C