De-dollarization and the decline of U.S. dominance: How should you prepare for it?

The dollarization the end of the US Dollar Supremacy there has been a lot of Talk lately about an imminent decline of The US dollar as the world's Reserve Currency countries around the world are Decreasing their dependence on the US Dollar new digital currencies are rising To challenge the us-dominated Fiat System but is the decline of the US Dollar really happening and if so how Fast and most importantly what are the Assets that could replace the dollar or At least benefit from its demise we Address all these questions in this Video before we start as always don't Forget to like the video subscribe to Our Channel and turn on the notification Bell to stay up to date with our next Videos I'm Giovanni host and this is a Cointelegraph report So first of all what is a reserved Currency a reserve currency is a foreign Currency that is held in large Quantities by a country's Central Bank The Central Bank uses it for carrying Out International transactions and Settling International debts and Obligations the US dollar is currently The world's dominant Reserve currency Meaning the vast majority of International transactions happen via The US dollar but the dollar hasn't Always been the world's Reserve currency In modern history there have been six

Major Global Reserve currencies their Status depended on the global influence Of the country that issued them The British pound was the dominant Currency for most of the 19th century When the British Empire's Global Influence was at its peak it started to Decline after World War one which Heavily impacted the British economy on The contrary the United States came out Stronger from the war and its status of Global power was on the rise with the Breton Roots agreement in 1944 the U.S Dollar officially became the world's Reserve currency since then bilateral Trade between most countries has been Happening via the US dollar the U.S Dollar was fully backed by America's Gold reserves until 1971 when President Richard Nixon abandoned the gold Standard from that point on the value of The dollar would not be backed by gold But just by faith in the U.S status as a Global superpower and financial Stability now let's fast forward to the Present in the last two decades the US Dollar's dominance as a result currency Has been steadily declining from Representing about 70 percent of all Global reserves in 2000 it is now down To less than 60 percent and the trend Continues to move in the direction now There are a few reasons for that one is The emergence of other major currencies

That are challenging the dollar as an Instrument for international trade Launched in 1999 the euro is currently The world's second largest reserve Currency also the rise of China as the World's second largest economy has Boosted the Yuan as an instrument for International transactions but a major Turning point happened last year when The U.S imposed unprecedented sanctions On Russia as a response to the invasion Of Ukraine Russia lost access to 300 Billion dollars in its reserves which Were frozen by the U.S government and Its allies that sent a warring alarm to Governments around the world which Became aware of the risks of depending Too much on the US dollar since then a Number of countries not aligned with the U.S led Western Bloc have been looking For alternatives to the dollar earlier This year the U1 became China's main Currency for cross-border transactions The United Arab Emirates and India are Exploring the use of Rupees to trade Non-oil Commodities meanwhile the brics Nations are planning to create their own Currency for international trade to Better understand this diversification Trend we talked to Zhong Yuan zolu a Fellow for international political Economy at the Council on Foreign Relations what we are observing is Actually the development of an

Alternative Global Financial and Monetary or currency system that is not Necessarily dominated by the US dollar Or for that matter the US government the These activities this started before Western sanctioned against Putin and its Regime and a lot of the reason the Concert is sanctioned effort are Accelerated what has already been going On so now the big question does all of This mean that the US dollar will really Lose its status as a global Reserve Currency To answer we need to take a closer look At the potential competitors the Euro The second largest reserve currency is Still far from challenging the US dollar Dominoes and it is not gaining any Additional Traction in international Trade mainly the reason is that the European Union is still perceived as a Very much fragmented political entity Within a certain future the strongest Contender to the dollar is probably the Chinese Yuan considering the ascent of China as a global power and the world's Second largest economy still China is an Authoritarian country with very strict Capital controls that prevents the U1 From becoming widely used in International transactions China is the Largest trading economy in the world Since 2010 a lot of the Chinese policy Makers complain about the mismatch

Between the role of the remain b as uh International Trade versus China's Trading positions finally the British Pound and the Japanese Yen do not have The depth and liquidity to form the Backbone of the world's Financial system Basically no existing fiat currency has The characteristics to take over the US Dollar's role as a world Reserve Currency some analysts see gold as the Asset that will benefit the most from The dead dollarization process last year The amount of gold bought by central Banks increased by a hundred and fifty Two percent the reason for that is Simple gold has a 5 000 year track Record as a store value and is seen as a Safe haven asset against geopolitical Risk and high levels of inflation To get a deeper understanding of this Trend we talked with senior commodity Strategists at Bloomberg Mike McGlone I Just think there's a churn trend for Central banks to accumulate gold I don't Think that's going to stop it's going to Continue that's partly as a response to The war and maybe as what people claim The U.S using the dollar as a weapon I Think Gold's gonna break out and go much Higher that's around two thousand Dollars an ounce at the moment we're Trading this at the end of May Um And I think it's going to go to three

Thousand dollars an ounce another asset That could benefit from the Dedolarization process is of course Bitcoin Bitcoin is often described as The digital version of gold because of Its limited Supply Like gold Bitcoin doesn't depend on any Government which potentially makes it an Attractive asset for countries that want To diversify the reserves El Salvador Has been buying Bitcoin as part of its Reserves after making it a legal tender In 2021. however Bitcoin is a still Nascent asset it is highly volatile and Widely perceived as risky that still Prevents major organizations and central Banks from using it as a reserve asset Eventually central banks will buy Bitcoin but we're very far from that It's just too small of a market still Very volatile for the central banks the US Dollars decline as a global Reserve Currency is definitely happening it's a Natural consequence of the increasing Amount of challenges to America's status As a superpower However it will be a gradual process and At least at the moment it doesn't look Like any other currency can replace the Dollar The most likely scenario would be the Emergence of a more Diversified system Where a number of currencies and assets Will be gaining share over the dollar as

Part of country's reserves and in International trade as we saw gold is Already gaining traction Bitcoin which Shares many of the characteristics of Gold will likely benefit from this Process as well it just needs time to Mature and establish itself as a widely Adopted mainstream asset that's all for Today's video thank you for watching I'm Giovanni your host see you next time

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