The current global and economic financial crisis may lead to the end of the US dollar hegemony.
De-dollarization is not a recent story, but it seems that this process could now be accelerated by the decisions of US regulators and government.
De-dollarization is currently studied by professionals and economists, and even Janet Yellen, the US Secretary of the Treasury, addressed the topic publicly.
The same did Lavrov, the Russian Foreign Minister, who said that de-dollarization can’t be stopped now. The BRICS block is the leader of the process: Brazil, Russia, India, China and South Africa want to create a reserve with a global currency.
This, of course, raises questions about the role of cryptocurrencies – and it seems that Bitcoin might become the next hegemonic currency around the world.
This and much more in this number of FinTech Weekly – follow us to discover fintech news, events and insights.
Sergey Lavrov, the Russian Foreign Minister, recently addressed the issue of de-dollarization. The mix of sanctions issued, along with the banking crisis, is putting at risk the supremacy of the US dollar. Digital currencies seem to be the solution – and many countries are already studying and using this solution to avoid further economic and financial problems.
According to Lavrov, the US has to be blamed for this shift towards digital currencies and for the current global financial and economic crisis. Moreover, he assessed that de-dollarization can’t be stopped.
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Niall Fergusson (Stanford University Hoover Institute Senior Fellow), says that de-dollarization is not a recent story. The movement is now making headlines due to the policies adopted by US regulators. Nevertheless, he doesn’t think that the dollar will be replaced soon.
The BRICS block is leading the de-dollarization of the global economy. Brazil, Russia, India, China, and South Africa have already surpassed the nations that form the G7 for what concerns purchasing power parity, and now they want to create a global reserve currency. This may lead to a massive adoption of Bitcoin.
In the meantime in Hong Kong, monetary authorities go on with their plan to create a regulatory framework that can help crypto firms to be fully compliant. Bloomberg reported that the Hong Kong Monetary Authority said that it expects banks to collaborate with licensed crypto firms, in order to support their right to have and use bank accounts compliantly.
In the meantime in the US, the FDIC – Federal Deposit Insurance Corporation – issued an order against the New Jersey-based Cross River Bank for allegedly engaging in unsafe practices that arose from its partnership with fintech lenders.
JP Morgan, one of the top US investment banks, continues to embrace tech innovations. The bank reported the creation of a new AI tool that uses ChatGPT to analyze the Fed statements and detect potential trading signals.
Good news for Twitter creators. Elon Musk’s plan to turn Twitter into an “Everything” and user-centric app took a step forward. Musk announced the introduction of monetization opportunities for Twitter creators that can now enable subscription-only content.
Owners Bank, the digital bank designed to offer small businesses the same financial opportunities offered by big banks to big companies, announced its partnerships with fintech companies to make the banking process as seamless as possible for small businesses.
New fintech companies arise to meet the needs of Muslims that want to be a part of the fintech boom experienced by Southeast Asia. These fintechs focus on Islamic finance – and this implies being Shariah-compliant, for instance by enjoying profit sharing agreements, avoiding transactions that involve tobacco or alcohol, and avoiding charging interest rates.
Amidst all the difficulties CeFi had to cope with in 2022, we talked about the top CeFi lawsuits under a 2023 perspective – read the complete article about the many ways CeFi broke.