The dollar's decline this year hasn't gone unnoticed.

It was rumored two weeks back that Arab oil producers were planning with countries like Russia, China, France and Japan to end dollar transactions for oil, favoring instead a basket of alternative currencies.

We've also heard chatter from the BRIC countries, some more vocal than others, about replacing the U.S. dollar as the world's reserve currency.

Maria Bartiromo caught up with Roger Altman, Founder & Chairman of Evercore Partners right after his panel discussion on Friday at The Economist's Buttonwood Gathering in New York City. Altman has served as Deputy Treasury Secretary under two administrations - President Bill Clinton in 1993 and President Jimmy Carter in 1977.

Dealing with a dollar crisis isn't new for Altman.

It was something he personally witnessed some 30 years back when he served in the Carter administration.

At that time, Altman said the debate was that a weak dollar was good for the country and the economy. While Altman didn't disagree on that point, he cautions against "counting on a slow weakening as compared to something which gets out of control as it did in the late 70s."

In an op-ed in the Financial Times last week, Altman wrote that Washington should take a stronger position on reducing the deficit. A lack of action on that front, according to Altman, could lead to a "punishing dollar crisis". While he thinks that a weak dollar is helpful, given that it can "promote exports and thus promote growth". His biggest concern is "the relationship between our unsustainable fiscal outlook and the possible fallout from that on the dollar and the possibility of a dollar crisis."

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So what are Washington's options? Altman thinks that they'll have to come up with a" reduction package and include restraint and new revenue." And that package would have to be big, given the size of the fiscal gap.

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Finally, Altman doesn't see the dollar being replaced as the reserve currency in the short to medium term. He defines that period as over the next three to four years and said "I don't think that's in jeopardy, in part because there's no immediate alternative." He does however, think that in 15-20 years time, there could be more "diversity in terms of currencies", with a country like China, having "a much more diversified set of holdings".

Liza Tan contributed to this article. 

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