In a bid to break free from the dominance of the US dollar, several countries are embracing de-dollarization – a strategy aimed at reducing their reliance on the world’s reserve currency and promoting economic self-sufficiency.
The push for de-dollarization has gained momentum in recent years, with nations seeking to diversify their currency reserves and engage in trade using alternative currencies. At the forefront of this movement are BRICS (Brazil, Russia, India, China, and South Africa) nations, which have been actively promoting the use of the Chinese yuan for international transactions.
ASEAN (Association of Southeast Asian Nations) countries, including Singapore, Malaysia, Hong Kong, Cambodia, Laos, Vietnam, Japan, Brunei, Thailand, and the Philippines, have also introduced a QR code system to reduce payment expenses by 30%. This move is seen as a step towards de-dollarization and an effort to shield their economies from potential sanctions.
Other countries, including Saudi Arabia, Turkey, Venezuela, Iran, Ghana, and Bolivia, have joined the de-dollarization initiative, seeking to decrease their dependence on the US dollar.
However, experts warn that de-dollarization poses significant challenges. The success of a new currency depends on its stability and legitimacy, as well as the confidence of international investors. Joyce Chang, Chair of Global Research at J.P. Morgan, highlights the importance of robust capital markets, rules of law, and institutional transparency in maintaining the dollar’s global dominance.
As countries continue to explore alternative currencies, the future of de-dollarization remains uncertain. Will these nations be able to break free from the dollar’s grip, or will they face economic instability and financial losses? Only time will tell.
Source: Watcher Guru
