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The World Bank expects the U.S. dollar to lose its solitary dominance in the global economy by 2025, as the euro and the renminbi establish themselves on an equal footing in a new

“multi-currency” monetary system. The shift will be driven by the increasing power and strength of emerging market economies, with six countries — Brazil, China, India, Indonesia, Russia and

South Korea — accounting for more than half of global growth in 14 years. According to the World Bank report — released on Tuesday — emerging economies will grow at a rate of 4.7 per cent

between now and 2025, a much faster pace than advanced economies which are expected to grow by 2.3 per cent over the same time-frame. “The balance of global growth and investment will shift

to developing or emerging economies,” said Mansoor Dailami, the lead author of the report. The implications are wide-ranging. For instance, Mr Dailami said this power shift would lead to big

boosts in investment flows to the countries driving global growth, with a significant increase in cross-border mergers and acquisitions activity, and a changing corporate landscape in which

“you’re not going to see the dominance of established multinationals”. In addition, a different international monetary system will gradually evolve, wiping out the US dollar’s position as

the world’s main reserve currency. “The current predominance of the U.S. dollar would end sometime before 2025 and would be replaced by a monetary system in which the dollar, the euro and

the renminbi would each serve as full-fledge international currencies,” the report said, highlighting what it considered the “most likely” of three scenarios for the currency markets in 15

years. The report identified the euro as the most “credible” rival to the U.S. dollar, with one caveat. “Its status is poised to expand, provided the euro can successfully overcome the

sovereign debt crises currently faced by several of its member countries and can avoid the moral hazard problems associated with bail-outs of countries within the European Union,” the report

said. On China, the report noted that authorities there had already started “internationalizing” the renminbi by developing an offshore market in the currency and encouraging the use of the

renminbi in settling and invoicing international trade transactions. “A larger role for the renminbi would help resolve the disparity between China’s great economic strength on the global

stage and its heavy reliance on foreign currencies,” the report said. The scenario presented by the World Bank means that financial institutions will have to “adapt fast to keep up,” said

Justin Yifu Lin, the group’s chief economist.