3 Difficulties of The De-Dollarization Process

The world is moving towards de-dollarization by making local currencies the first choice of payment. The US dollar is receiving stiff competition from developing countries looking to cut ties with the greenback. The battle to uproot the USD from the world’s currency has begun, and the first step is to de-dollarize their economies. The central banks of developing countries are diversifying their reserves by adding gold and other currencies to their kitty.

Also Read: De-Dollarization: 2 Countries Settle $37 Billion in Local Currencies

The goal is to slowly yet steadily end dependency on the US dollar and boost the de-dollarization agenda. However, there are difficulties in making the de-dollarization initiative a reality, as the US dollar is a stronger force to reckon with. It’s arduous to dethrone the greenback as its roots are placed worldwide for all financial transactions. This article will highlight the top three difficulties in achieving the de-dollarization agenda.

Also Read: How Sanctions on Russia Are Fueling the Trend Toward De-Dollarization

Top 3 Difficulties of Making De-Dollarization a Reality

brics de dollarization us dollar usd currency
Source: iStockphoto

Developing countries lack the main ingredient to make de-dollarization a success; the ingredient is unity. Emerging economies around the world are not geographically united like the European Union (EU). While the EU countries share borders and similar cultures and values, developing nations are divided and not like-minded.

Also Read: Top U.S. Stocks To Buy Before Trump’s Inauguration

In addition, they are also involved in trade tussles and always aim to outdo each other on the global stage. Take for example India and China, both the countries unite as one during summits, but sling mud at each other at national levels. Their border dispute is unending, and they hesitate to use each other’s currencies for trade and commerce. Therefore, de-dollarization is nothing but a distant dream as developing countries share no like-mindedness.

Below are the three main reasons why the process of leaving the dollar behind could fail in the coming years:

  • The value of local currencies is minimal and barely spikes in value like the US dollar.
  • Local currencies don’t have the bandwidth and the reach that the US dollar commands globally.
  • The Chinese yuan and other local currencies cannot withstand the whiplash of the Forex market like the US dollar does.

  • De-dollarization
  • US DOLLAR

Comments

Post a Comment

Popular posts from this blog

Inquiry on Binance headquarters and audit left unanswered by new CEO Richard Teng

The new CEO of the Binance exchange, Richard Teng, dodged answering a question about the location of the company’s headquarters and its audit or. His statement was made as part of the Crypto and Digital Assets Summit organized by the Financial Times. During his speech, the new CEO of the exchange once again emphasized Binance’s “shortcomings” with respect to the company’s regulatory requirements. At the same time, Teng avoided questions related to the organization’s activities and structure. You might also like: Richard Teng takes the helm at Binance promising a shift away from outlawed behaviour When about Binance’s global headquarters , and whether the company will be audit ed, or if it plans to apply for a license in the UK, Binance’s new CEO said that he had already answered each of the questions asked “previously.” When asked again about the headquarters , Teng again brushed it off, emphasizing that it was “under consideration.” “...
Read more

Polygon 2.0 Aims to Become the Value Layer of Internet

Image
Thus, Polygon 2.0 will serve as a fundamental layer to create, exchange, as well as program value. The team claims that Polygon 2.0 will help democratize the global economy just as the internet helped in democratizing information access. Polygon 2.0 brings decentralized finance, digital ownership, and innovative coordination methods to the forefront. It fills the gap in creating an Internet that prioritizes users rather than gatekeepers, rent-seekers, or intermediaries. The new and upgraded Polygon version will serve as the blueprint for building the Value Layer. It Features a set of proposed upgrades bringing a major shift in the protocol’s architecture, tokenomics, and governance. The team shall reveal more details regarding Polygon 2.0 in the coming weeks. They will detail the future of the Polygon PoS chain, as well as the utility and the evolution of the MATIC token. Recommended Articles ...
Read more

Australian regulator ASIC to ramp up focus on digital scam

ASIC, Australia’s financial watchdog, has announced a new four-year plan prioritizing consumer protection against digital scams, including cryptocurrency-related frauds. ASIC, the Australian Securities and Investments Commission, has unveiled a new four-year strategy aimed at shielding consumers and businesses from digital scams, including those involving cryptocurrencies. Chair Joe Longo indicated that while ASIC has made strides since outlining its priorities last year, there’s ongoing work. The regulator is adapting to shifts in sustainable finance, the digital economy, and the challenges an aging population poses. You might also like: ASIC releases the top 10 ways to spot a crypto scam Longo also mentioned that ASIC closely monitors how emerging technologies like AI could impact businesses and consumers. Australia has been generally favorable toward digital currencies. The country has both embraced and regulated cryptocurrencies, most notably by exempt...
Read more