The complaints by Russia, China, India, Brazil and others about the dollar's role as the world's reserve currency as political posturing and nothing more. There is no near-term alternative to dollar liquidity worldwide and can't be for quite some time to come.
The world is swimming in dollars. The Federal Reserve is the de facto central bank to the world. You need look no further than the myriad "swap lines" the Fed gave to foreign central banks to boost their dollar liquidity in the wake of the credit crisis.
The many nations that have benefited from the largest consumer market in the world - yes, the U.S. - have little choice but to recycle their foreign exchange back to the U.S. as a consequence of the "circular flow of trade." Any deviation from that, even on the margin, means a dollar crash and an associated interest rate spike in the U.S., killing off the very consumer that provides the world's great exporters, from China to Belgium and many more, the revenue they would like to direct to some other "reserve currency."
As for the practicality of creating a new world currency, history is a useful guide here. It would be like trying to impose a widely used global language ... remember the Esperanto movement of decades past?
To add a little insult to injury to our more "cosmopolitan" trading partners, just as English is the true language of global business, the dollar obviously greases global trade. It took Europe more than 40 years to create the euro, opening the European Common Market with the Treaty of Rome in 1957, moving on to develop the pegged currency system of the European Exchange Rate Mechanism (ERM) that broke apart in 1992 and then the formation of the euro that began circulating in 2000.
There were many iterations and numerous stops and starts along the way. In fact, the euro almost never happened after it was voted down by Danish citizens in the mid-1990s. Britain still has not joined the party.
The creation of the euro, which in my opinion is a very unstable currency, was fraught with difficulties and it has yet to anchor itself to the world forex markets in the same manner the deutschemark was once the anchor currency of Europe.
China's yuan is not freely convertible and Russia's ruble is not worth the paper it's printed on unless commodity prices support it, leaving the dollar as the world's king currency.
By the way - and some would argue with me on this point - a gradual depreciation of the dollar, in my opinion, is not such a bad thing - it would prove the Fed's reflationary efforts are taking hold. It would also help boost American exports and import a modest bit of inflation, which is required during these deflationary times.
A sharp rise in the dollar's value would be bad, since it is the equivalent of a tightening of Fed policy. A strong dollar restricts export growth, combats inflation (which really isn't the problem right now) and slows the domestic economy, something we are simply not ready for...