Eswar Prasad, a trade professor at Cornell University, told Cointelegraph,“Decentralized cryptocurrencies such as Bitcoin still have highly volatile values, rendering them unsuitable as mediums of exchange or as reserve currencies.”US dollar global foreign reserves declineSince the end of World War II, the US dollar has reigned as the world’s dominant currency, powering around 88% of global trade transactions in 2024.
Although the country accounts for roughly 25% of global GDP, its currency reigns over nearly 60% of global foreign exchange reserves—far outpacing its nearest rival, the euro. But this dominance is increasingly under pressure, with the strategic use of economic sanctions in the past leading some countries to seek alternatives, even as US President Donald Trump regularly threatens 100% tariffs on countries that actively seek to substitute the greenback. In Russia, whose access to the SWIFT payment platform is crippled by sanctions, companies have been using cryptocurrencies as a means to skirt restrictions, turning to Bitcoin and other digital assets to conduct cross-border business.
Still, Prasad emphasized that no viable alternative is poised to displace the US dollar as the dominant global reserve currency. “The dollar’s strengths lie not just in the depth and liquidity of US financial markets but also in the institutional framework that underpins its status as a safe haven.”This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice.
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Author / Journalist: Cointelegraph by David Feliba
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