Donald Trump has vowed to end de-dollarization, a phenomenon that has repeatedly wounded the US dollar ever since the currency dynamics began to spread out. The US dollar is now surrounded by credible foes and enemies who want to establish their own supremacy by detailing the dollar’s prestige. Will the American currency be able to withstand the test of changing global dynamics? The scenario points towards a negative stance, indicating that the phenomenon of de-dollarization is indeed unstoppable.
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3 Reasons Stating Why De-Dollarization Cannot Be Stopped
1. Rising Geopolitical Changes Nagging The US Dollar
The geopolitical narratives are now increasingly taking a new turn. With nations coming up with their dynamics, infrastructures, and orders, their need to rely on USD for further help seems to be dissipating with each passing day. At the same time, alliances like BRICS and ASEAN are now vying for an independent world order, one that does not want the US dollar to stay on top of the radar. Rising USD weaponization and the sanctions imposed by the US are two of the key reasons driving this change.
2. Diversification of Reserves
Another striking element that has recently picked up speed is the diversification of reserves that the nations have started to opt for as of late. Several nations have started to diversify their reserves into other assets, including gold, in an attempt to reduce their dependence on the US dollar. This has been done to protect independent economies from experiencing massive fluctuations that the dependence on USD usually brings in. This has also prompted nations to adopt a proactive stance, with nations mulling over moving away from the dollar for good.
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3. Rise of Multipolar Currency Order
Another significant development that the current world order is currently encountering is the rise of the multipolar currency order. Many countries have started to commence global transactions in local currencies, putting up the foundation of a multipolar currency order. Alongside that, the advent of digital currencies and cryptocurrencies has also opened up new avenues for the nations to explore, thereby accelerating the de-dollarization process.
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