The author of a new book has emphasized the importance of wisely managing the US dollar, given its status as the world's dominant currency.

"We have this great power, and that means we have a commensurate amount of great responsibility," said Paul Blustein, author of King Dollar: The Past and Future of the World's Dominant Currency.

He made the comments during a book talk this month at the Center for Strategic and International Studies in Washington DC. Blustein, formerly a reporter with The Washington Post and The Wall Street Journal, is a senior associate with the Economics Program and Scholl Chair in International Business at the center.

In King Dollar, Blustein looks at how the dollar became the world's most important currency and talks about the many predictions that it will not remain so.

People often point to the likes of Bitcoin, China's renminbi, or the US' growing debt and rising prices as reasons the dollar may lose its power. However, Blustein believes the dollar will remain the top currency unless the US government makes bad decisions.

For example, he noted how the United States uses the dollar to sanction countries such as Russia. Even though Russia tries to push back, it has had little success — demonstrating that the dollar still gives the US a lot of control in the world.

Blustein said the resilience of the US dollar stems from its unique strengths, particularly the liquidity of US Treasury securities. "When a crisis happens, everyone's desperate to get their hands on cash," he said. "You can buy and sell huge amounts without making the prices go up and down."

Geopolitical weapon

Blustein, however, pointed to the US' growing reliance on the dollar as a geopolitical weapon, particularly through sanctions enforced via the Clearing House Interbank Payment System, or CHIPS, which handles more than 90 percent of global dollar transactions.

"If you're transacting in dollars, you really have to have a connection to CHIPS," he said.

While sanctions proved effective during the start of the Russia-Ukraine conflict, Blustein warned of unintended consequences.

"Sanctions inflict pain on the poor, on innocent bystanders," he said. "The bullying that's involved by the US government will infuriate other countries, alienate allies and provoke adversaries."

He said overreach could push nations to explore alternatives, though it is neither easy nor happening soon. He also criticized recent US policy moves, calling high tariffs and threats against allies shameful.

"The threats against Canada are the most egregious example," he added, warning that such actions could fracture alliances vital to the dollar's stability.

yifanxu@chinadailyusa.com