The U.S. dollar is now attracting stiff competition from the constantly evolving multipolar currency narrative. With the BRICS ditching the U.S. dollar officially, it seems that the new world order is emerging, where local currencies are now reigning supreme. Joining in the queue are the latest ASEAN members, the robust ten-country power pact, which may hamper some of the US dollar prospects if they decide to join forces with the leading world allies.
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Multipolar Concept Shaping the World
The murmurs of ASEAN dumping the U.S. dollar earlier caught pace in 2023 when the countries contemplated embracing local currency narratives to promote regional supremacy.
The ASEAN nations, which comprise Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, had earlier conducted a meeting to end their reliance on the USD, Euro, Yen, and British Pound.
This was primarily done to catapult the progress of local currencies and help them ascend on the global currency radar. The members also shared comments on why the nations must end the use of USD for the long haul, citing U.S. sanctions as the key issue.
“Be very careful. We must remember the sanctions imposed by the US on Russia. Visa and Mastercard could be a problem,” Indonesian Prime Minister Widodo shared during the event.
With ballooning US debt metrics and a worsening economy on hand, the United States is now attracting issues that can hinder the progress of the USD in the long run. Decades ago, the dollar stood unhinged, but with the ASEAN and BRICS narratives gaining momentum, the USD may now encounter deep trouble hampering its global ascent.
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10 U.S. Sectors To Be Affected if ASEAN Dumps the US Dollar
The top ten U.S. sectors that may feel the crushing pressure post-USD dump by ASEAN nations are:
- Financial Services
- Trade
- Manufacturing
- Tourism
- Technology
- Agriculture
- Energy
- Retail
- Transportation
- Real estate
Why Are Regional Currencies Gaining Strength?
The multipolar concept, a term coined to denote a basket of currencies leading the financial system, is very much underway in present times.
With robust economic competition prevalent in space, nations have now come up with new perspectives and offerings that can help them transact better by offering eccentric services and products in return.
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This narrative threatens the global supremacy of the U.S. dollar to an extent, as countries now have alternative currencies to explore, thereby fueling the multipolar regime. The inflating US debt metrics, poor administrative infrastructure, and its capability to weaponize the dollar for geopolitical manipulation are now being debated openly. This is further downgrading the currency, compelling other regions like ASEAN to compete for global power and recognition.
“This dominance continues now, with the U.S. using its clout to drive socio-political goals by imposing sanctions. And by excluding non-compliant governments and organizations from the global trade and economic systems where the U.S. is dominant. The best example of this is the sanctions on Russia. And also certain Russian citizens due to their invasion of Ukraine. In the hope of influencing their ability to conduct the war,” as shared by Sable International