• 23 July, 2024
News

De-Dollarization: US$ Losing the Global Reserve Currency Status

The United States (U.S.) economy is in a shock as Russia and Saudi Arabia are reportedly set to use the Chinese Yuan for international trade. The de-dollarization air is getting even more omnipresent with each passing day as nations look beyond the U.S. dollar for international trade settlements.

Source: Visual Capitalist

Iran and Saudi Arabia are reportedly considering “joining an economic alliance with China and Russia.” Reports also indicate that Saudi Arabia might as well join the BRICS (Brazil, Russia, India, China, and South Africa) countries.

The U.S. is asking only one question right now: “What happens if (the U.S. economy) the dollar is no longer the world’s dominant currency?”

In her recent testimony, the U.S. Treasury Secretary Janet Yellen reportedly said that while China and Russia might be seeking an alternative to the U.S. dollar, it is easier said than done. Yellen is reported to still be confident about the dollar remaining the global reserve currency.

Sharing the breaking news, Twitter user @HumbleBitcoiner tweeted:

https://twitter.com/HumbleBitcoiner/status/1640178410746966016

Reacting to the said tweet by the @HumbleBitcoiner, Elon Musk tweeted:

Former United States Assistant Secretary of the Treasury for Public Affairs, Monica Crowley, says, Since the end of World War II, the dollar was originally backed up by gold, but President Nixon took us off the gold standard so there is no hard asset backing up the dollar anymore for the last 50 years,

but also it has been backed up by the strength and the economic power of the United States and the fact that oil has always been traded in dollars, if that were to end, that would mean the end of the U.S. dollar.

Adding on to her analysis, Monica Crowley states the impacts of the ongoing war of President Biden on domestic energy production, and the Ukraine war, have worsened the situation.

The world’s reserve currency, having that status has been a real privilege. But we have abused the privilege by reckless monetary and fiscal policies over many years (certainly over the last couple of years), which has really devalued the dollar, says Monica Crowley.

Notably, it is reported that following the Russia-Ukraine war in 2022, the ruble-yuan trade has soared over “eighty-fold.” As per a Russian news agency, Russia and Iran are even considering launching a gold-backed cryptocurrency.

Lately, Brazil and Argentina have reportedly begun discussing a common currency. The UAE and India are also reported to have held talks to use the Indian rupee for trading non-oil commodities.

But as per the U.S. Federal Reserve Board (FRB), it is coordinating with the Central Banks in Canada, England, Japan, the European Union, and Switzerland for working to “enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.”

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