De-dollarization is no longer a dirty word in the financial sector, as developing countries are positioning their economies to cut ties with the US dollar. While the threat to the USD comes mainly from the Federal Reserve printing unlimited currency bills and uncontrolled debt in the homeland, developing nations are grabbing the bull by the horns to keep local currencies on top of the global financial order.
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Global Trade Shifts: Emerging Economies Challenge Dollar Dominance
The de-dollarization process termed impractical a decade ago, is now a reality in 2024. Talks of issuing a common currency among emerging economies are growing as they look to ditch the US dollar for trade.
A common currency would be a paradigm shift in how global trade operates. New trade policies could be written to favor their economies and directly hit the Western financial domination.
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US Dollar Fights the Global De-Dollarization Agenda
The US dollar’s fight with the global de-dollarization initiative has only begun this year. The White House needs to take concrete steps to stop the spread of the agenda worldwide. To make it happen, the US must halt sanctions on countries it deems rouge. Sanctions are the top reason why developing nations took the de-dollarization stance.
US Treasury Secretary Janet Yellen confirmed that America’s pressing sanctions led to the de-dollarization gaining acceptance globally. Developing countries want to protect and safeguard their economies from the White House’s unruly sanctions. Since the US dollar has been weaponized, they aim to weaken it by trading in local currencies.
The move would help them strengthen their native economies and, in turn, bolster their local currencies, enabling businesses to thrive. The fight against the US dollar will only intensify in the next decade as more countries start accepting the de-dollarization project.
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The US needs to act quickly and douse the fire it generated through sanctions. Failing to do so will put the USD in the back seat of the global economy.