The Triffin Dilemma is a fundamental paradox that arises when a nation's currency also serves as the world's primary reserve currency. It was coined by the Belgian-American economist Robert Triffin in 1959.

The dilemma highlights the inherent conflict between a country's short-term domestic economic interests and the long-term international stability required of the global reserve currency.

As described in the context of the USD-centric system, the dilemma works as follows:

To provide global liquidity for international trade and to meet the world's demand for foreign exchange reserves, the reserve currency issuer (the US) must continually run deficits.

The inevitable consequence of running these ever-growing deficits is the hollowing out of domestic productive assets and the accumulation of massive sovereign debt.

Ultimately, this large and growing debt undermines confidence in the reserve currency's long-term value and the issuer's ability to repay it in "real terms".

The reserve currency issuer is, therefore, stuck in a "Catch-22":

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