The current financial world is largely accommodating talks of rising de-dollarization, discussing whether the US dollar has become a futile asset. The USD is now a central point of many debates, where keywords such as “USD weaponization” or “the Chinese Yuan taking over the dollar” have been hot topics, sparking lively discussions. However, in reality, the US dollar truly has no competitors and is a currency that truly has the power to turn the tables around. Here are three reasons why the US dollar cannot be defeated by either gold, crypto, the yuan, or the euro.
Also Read: ASEAN Officially Announces They Are Not Giving Up the US Dollar
3 Reasons Why USD Is Unbeatable in Global Currency Wars
1. Lack Of Trust In Alternatives
The US dollar reigns supreme due to its long-lasting impact value, as well as its flexibility in the market across the world. According to a Financial Times article, most alternatives like the yuan and euro have project flexibility, compelling experts to crown the US dollar as unbeatable, no matter how intense circumstances may eventually become.
“The dollar’s dominance will remain in place for the foreseeable future because there are no viable alternatives,” predicts Sobel at the OMFIF. “I question whether Europe can get its act together, and China is clearly not opening its capital account any time soon. So what’s the alternative? There just isn’t one.”
2. Digital Assets Are No Good
There was a time when the US dollar was compared with digital assets like Bitcoin. Touted as digital gold, the market made Bitcoin compete with the US dollar, projecting a subtle speculation of the digital asset domain taking over the US dollar. On the contrary, this scenario is unrealistic to begin with. The crypto markets witnessed one of their most violent crypto shocks/liquidations two days ago, exhibiting how volatile the market truly is to begin with. Hence, it proves the fact that the domain is clearly not ready to take over the USD supremacy.
3. Dollar Bound To Surge On Softening Fed Stance
The Federal Reserve’s current stance is all about keeping inflation in check. Once the potential rate cuts have been announced and deployed, the inflation check could be balanced, allowing room for the USD to breathe. This can usher in a value surge in the dollar’s power and glory, and may ramp up foreign investment inflows into the US to gain momentum once again.
Also Read: Citigroup US Dollar Outlook Signals Urgent Threat from BRICS Shift
