The return of Robert Triffin’s paradox?

Across several articles and books in the 1960s, Robert Triffin laid out the famous Triffin paradox: For a currency to be the dominant reserve currency (the dollar), the debt issued in this currency must be safe, liquid and large; the country that issues this global risk-free debt enjoys reserve currency privilege : it can easily borrow from the rest of the world at a low cost to finance additional investment; But the quality of this country’s debt then deteriorates: first, in order to meet global demand for its debt, the country is required to continuously run an external deficit; second, although it can avoid it by borrowing and then reinvesting in the rest of the world, it is encouraged to run continuous external and fiscal deficits due to the ease of financing these deficits. The accumulation of public and external debt gradually erodes the quality of the country’s debt to the point where it loses the ability to issue the dominant international reserve currency. It is possible that the current trend in the United States corresponds to what the Triffin paradox describes: the fact that the dollar is the dominant reserve currency will inevitably lead to it losing this status.