De-dollarization and Currency Competition - The industry observes a shift towards a retro-future currency race, with BTC and ETH in multisigs gaining traction [1] - China's RMB is surpassing the dollar in outbound trade payments, facilitated by the Belt and Road initiative, indicating active dollar displacement [1] - The industry notes the expansion of e-RMB rails through ASEAN, suggesting a move away from SWIFT [1] Stablecoin Evolution - The industry anticipates that stablecoins will adapt to de-dollarization by emerging in non-USD forms like RMB, RUB, and INR [2] - In the absence of dollar reserves, stablecoins will compete to hoard BTC and ETH as backing [2] - Stablecoins are evolving into digital currencies competing for trust, liquidity, and integration, shifting backing from sovereign debt to crypto-native reserves [3] P2P and Reserve Currency Dynamics - P2P volumes indicate a shift, with NGN, CNY, and RUB dominating stablecoin sell-side flows, forming FX and remittance infrastructure outside the banking system [3] - The next reserve currency might be collateralized by crypto, issued by code, and adopted P2P, potentially originating outside state control [3] - The industry foresees a multipolar, permissionless world, moving away from dollar or yuan dominance [4]

I'd like to bring in a true economics expert now, Ken Rogoff. Ken formerly, as I mentioned, served as the chief economist and director of research at the International Monetary Fund. He's a professor of economics at Harvard University. He's the author of multiple books, including the recently published Our Dollar, Your Problem, an insider's view of seven turbulent decades of global finance and the road ahead. Ken, welcome back to the show. Good to see you. Thank you, Ally. That was a great overview. I'm sti ...

De-dollarization Trends - The dollar's status as the world's reserve currency is being challenged, potentially leading to significant consequences for the US [1] - There are indications of de-dollarization occurring slowly, with reserve allocators reducing their dollar holdings [2] - Banks in China are encouraging emerging market clients to borrow in renminbi instead of dollars [3] - Private and semi-official investors, including pension funds, are diversifying away from the dollar [3] - The ECB aims to increase the prominence of the euro in international transactions, presenting an opportunity as the US disengages [11] Underlying Factors - The perception of US disengagement from the world and policy uncertainty are contributing to de-dollarization [4] - A breakdown in the perception of US exceptionalism and ordered liberty is influencing investors' views on the dollar [5] - Policy uncertainty emanating from the US, including fiscal and social tensions, affects how foreign investors perceive the US [15] Dimensions of De-dollarization - De-dollarization encompasses multiple aspects, including reduced dollar financing, trade invoicing, and reserve holdings [8][9] - The Bank for International Settlements assesses dollar usage across five dimensions, most of which have shown a slow decline in recent years [8][9] Potential Countermeasures and Reversal - Reversing policy uncertainty and moving towards trade liberty could help reverse the de-dollarization trend [14] - Increased European integration, such as joint bond issuance and unified policies, could strengthen the euro's international role [13] - While Federal Reserve rate hikes might temporarily support the dollar's value, they may not counteract the long-term structural trend of de-dollarization [7]

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Over the last few years, three big things that hadn't happened in my lifetime prompted me to do this study. First, countries didn't have enough money to pay their debts, even after lowering interest rates to zero. So, their central banks began printing lots of money to do so.Second, big internal conflicts emerged due to growing gaps in wealth and values. This showed up in political populism and polarization between the left who want to redistribute wealth and the right who want to defend those holding the w ...

Reserve Currency Status - The US dollar is expected to remain the world's reserve currency in 10 years due to the difficulty of quickly replacing reserve currencies [1] - The percentage of reserves represented by the US dollar is expected to slightly decrease in 10 years [1] - The US dollar's reserve percentage has already decreased from 80% to 70% [1] Alternative Currencies - A credible alternative to the US dollar is needed to replace it [2] - The Euro is currently the only credible alternative, but Europe needs to improve its coordination [2]