Ending the conflict in Ukraine has become not only a geopolitical concern but also an economic necessity for Washington, as the prolonged war threatens the US dollar's role as the world's primary reserve currency, according to The Independent.

A source close to President Donald Trump's administration told the newspaper that resolving the crisis is now viewed as essential to safeguarding the dollar's global standing.

"The point is that ending the war now is an economic imperative for the US based on trade. Added to that, it cannot put the dollar's status at risk," the source said, referring to a report recently submitted to the White House by the Center for Freedom and Prosperity.

The study warned that the continuation of the conflict and the resulting geopolitical fragmentation could accelerate global de-dollarization and weaken confidence in US financial instruments.

The source described the report as "a very significant piece of work," adding that it would likely influence the administration's thinking on future policy decisions regarding Ukraine.

According to the Federal Reserve's 2025 report on the international role of the US dollar, the currency's share of global foreign exchange reserves has fallen to about 58%, down from roughly 72% in 2001.

The International Monetary Fund  (IMF) noted that while part of this shift reflects exchange-rate changes, the broader trend indicates a steady diversification among central banks away from dollar holdings.

Dollar Decline

At the same time, analysts warn that the administration's push for a weaker dollar could further erode global confidence. In a recent  Forbes article, William Pesek argued that Trump's pursuit of a lower dollar exchange rate, promoted during his Asia tour, risks undermining the very financial foundation that gives the US global influence. Pesek drew parallels with Japan's decades-long stagnation, where currency devaluation replaced structural reform, resulting in diminished competitiveness and long-term economic malaise.

"While Trump aims to boost exports, he risks destabilizing the very financial foundation that gives the US global influence," Pesek wrote, warning that deliberate dollar devaluation could shake investor confidence in US assets and Treasury markets.

The Forbes report echoed broader warnings by institutions such as the Atlantic Council and Chatham House, which argue that Washington's fiscal deficits, reliance on sanctions, and policy volatility have already weakened trust in the dollar's neutrality as a reserve asset. Trump's open criticism of the Federal Reserve and its chair, Jerome Powell, has compounded these concerns, with markets viewing such rhetoric as an attack on the independence of the very institution that safeguards the dollar.

Despite the currency's continued dominance, experts caution that its long-term supremacy is no longer guaranteed. The cumulative effects of sanctions, geopolitical fragmentation, and soaring US debt could gradually undermine the dollar's foundation.

For the Trump administration, these warnings underscore the urgency of preventing further instability linked to the Ukraine war. As the source noted, the longer the conflict continues, the greater the risk that Russia- and China-aligned economic blocs will accelerate efforts to bypass the dollar-dominated system, reshaping the world economy in ways detrimental to US interests.

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