Morgan Stanley Sounds Alarm on US Dollar’s Dominance — Says Crypto Could Significantly Alter Currency Landscape

Morgan Stanley has warned astir the hazard of the U.S. dollar losing its dominance, fueled by increasing involvement successful integer assets, including bitcoin. Emphasizing that the U.S. dollar’s dominance “is being progressively scrutinized,” the concern slope stated: “A wide displacement towards reducing dollar-dependency is evident, simultaneously fueling involvement successful integer currencies specified arsenic bitcoin, stablecoins, and CBDCs.”

Morgan Stanley connected Dedollarization Risk

Morgan Stanley published a study past week titled “Digital (De)Dollarization?” written by Andrew Peel, the concern bank’s enforcement manager and caput of Digital Asset Markets.

“The U.S. dollar’s dominance arsenic the cornerstone of the planetary fiscal strategy is present being reconsidered successful the look of evolving geopolitical shifts and the increasing U.S. twin
deficits,” the enforcement said, adding:

Notably, the caller maturation successful involvement of integer assets specified arsenic bitcoin, maturation of stablecoin volumes, and the committedness of cardinal slope integer currencies (CBDCs), person imaginable to importantly change the currency landscape.

He noted that the U.S. dollar’s dominance “is being progressively scrutinized” arsenic “Recent U.S. monetary policies, combined with the strategical usage of economical sanctions, person prompted immoderate nations to see alternatives to the greenback.”

Meanwhile, “the European Union is actively moving to bolster the euro’s relation successful planetary trade, aiming to supply a viable alternate to the dollar” and “China is advancing the yuan successful planetary trade,” the manager detailed.

The Morgan Stanley enforcement manager further explained that inter-governmental organizations specified arsenic the BRICS economical bloc (Brazil, Russia, India, China, and South Africa), the Association of Southeast Asian Nations (ASEAN), the Shanghai Cooperation Organization (SCO), and the Eurasian Economic Union “are besides expressing involvement successful utilizing section currencies for commercialized invoicing and settlements.”

Noting that these organizations “collectively correspond a important information of planetary GDP,” Peel stated that “some members person shown a willingness to commercialized successful yuan, further indicating a displacement successful planetary currency dynamics.” He emphasized:

A wide displacement towards reducing dollar-dependency is evident, simultaneously fueling involvement successful integer currencies specified arsenic bitcoin, stablecoins, and CBDCs.

Do you hold with Morgan Stanley astir the hazard of the U.S. dollar losing its dominance? Let america cognize successful the comments conception below.