Part 3 A multipolar global reserve currency future?
No single contender looks like an obvious fit:
- USA/USD is current reserve currency but no reserve currency lasts forever.
- Europe/EU is a weird mix of independent countries and a single currency.
- China/CNY is the emerging economic power but their currency is not fully convertible yet and not trusted in many parts of the world. This is not like the UK handing leadership to USA with much shared beliefs and culture.
- Gold. This has the non-inflationary credentials and thousands of years of history, but as a physical commodity it is not Internet-friendly.
- BTC. This e-gold currency is Internet-friendly, making global transfers easy, but it is not mainstream-accepted.
One reason why a multipolar world is likely is that spheres of influence may replace today’s global market. Within the Chinese sphere (eg countries on the New Silk Road), the CNY maybe the accepted currency whereas it is not used in the Western sphere (eg Europe, Taiwan, South Korea, Japan, Australia).
Or we may see hybrids emerge, such as a CBDC backed by Gold.
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Bitcoin CBDC cny Default/Ignore Digital Gold el salvador eur Gold reserve currency usd