De-dollarization of economy

 Historically, the currency of the leading economy is used as a back up in global trade and enjoys lowest interest rate due to wide acceptance, e.g., Dutch guilder, British pound, and Currently US Dollar

Factors contributing to current de-dollarization

  • Rise of China
  • Withdrawal  of US from global trade arrangements, regional security guarantees and globalization
  • Rise of regional powers like India and their wish to hedge their bets against US Dollar and It's clout,e.g., promotion of rupee
  • Rise in populism, regionalism and widespread polarization, e.g., income inequality
Dominance of US Dollar is here to stay
  • Free trade and military power of USA
  • Chinese economies dependence on US Dollar
  • US edge on technology
  • Widespread suspicion of Chinese debt trap diplomacy
Rise and fall of currencies is not new in global history. But we need to understand the vital role a super power plays in global trade, security and creation of wealth and welfare.

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