Efforts to curb the independence of the U.S. Federal Reserve Board represent the biggest threat to the U.S. dollar's status as the world's reserve currency, says Fitch Ratings in a report published on Tuesday.

The U.S dollar has some key advantages over other leading currencies, the Fitch report notes. The greenback is underpinned by the U.S. Treasury market, which is the world's largest and most liquid for risk-free assets and, the Fed is independent from the U.S. government. Given these strengths, the U.S. dollar, "will almost certainly remain the world's most important reserve currency for the foreseeable future," the report days.

However, the Fed's independence is now being threatened by two pieces of legislation that are currently working their way through Congress, according to the report.

One bill would allow the Government Accountability Office to audit the monetary policy decisions of the Fed and make recommendations for administrative or legislative actions. A second bill would restrict the Fed's ability to provide financial sector support to deal with a crisis, and would empower a commission to review and recommend changes to the Fed's operations.

"It is the unambiguous intention of these legislative initiatives to curtail the independence of the Fed and allow for greater congressional oversight of monetary policy as well as the Fed's regulatory decisions and interventions related to financial stability," the Fitch report says. "If implemented, the proposals would diminish the appeal of the dollar as a reserve currency over time."

The heightened risk of political interference in monetary policy decisions, and the possibility of the Fed being utilized to undertake congressional priorities, such as funding infrastructure investment, would impact investors considering dollar assets, the report says. "There may also be concerns about episodes of financial sector stress being deeper and more prolonged if the Fed's policy response options were explicitly limited," it concludes.