In a new paper published on DoubleLine.com, Bill Campbell, Portfolio Manager of the DoubleLine Global Bond Strategy, argues that stablecoins and central bank digital currencies will enable sovereign states to replace the U.S. dollar for international payments, ending the dollar’s reign as the world’s dominant reserve currency.
“For three quarters of a century,” Mr. Campbell writes, “the U.S. dollar has reigned supreme as the world’s reserve currency. Even amid America’s declining share of the global economy and, since the Global Financial Crisis (GFC), massive monetization of the U.S. national debt, countries outside the U.S. had few alternatives to transacting cross-border in dollars and maintaining large foreign-exchange (FX) reserves in dollars. I believe the end of this era of dollar supremacy is underway. New financial regimes are busy rewiring the world’s monetary and payment systems. New cross-border payment systems and regional trade agreements are laying the infrastructure for a post-dollar financial order. Blockchain technology has already begun to provide a new system in cross-border payments aided by stablecoins and central bank digital currencies.”
To read the paper, titled “King Dollar Risks Being Dethroned as Blockchain Breaks Down Barriers to Entry,” please go to this landing page: https://doubleline.com/wp-content/uploads/King-Dollar-Risks-Being-Dethroned-November-2021.pdf
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