Due to the weakening of the U.S. geopolitical influence and the growing crisis in the U.S. economy, the U.S. dollar is weakening rapidly, gradually losing its position as the world’s reserve currency. This is stated in the analytical report “The Future of the Monetary System”, prepared by analysts of the Swiss bank Credit Suisse.
The document indicates that the U.S. national debt by early 2023 reached an astronomical value exceeding $ 30 trillion.
The bank experts say that under current geopolitical conditions, the creation of a new global world currency seems less realistic. According to their assessment, the global world is disintegrating and regional blocs of powers fighting each other are being formed. And under these conditions national governments will not agree to transfer part of their sovereignty to some transnational financial body.
A shift in global reserve currency status from the dollar to some other currency is also unlikely, according to Credit Suisse.
“The European Central Bank does not have as highly liquid and homogeneous assets as U.S. Treasuries, which other countries around the world could hold as a reserve. And the Chinese financial system is too closed for cross-border transactions,” the report’s authors point out.
According to the report’s authors, the most likely scenario is a gradual abandonment of a single global currency in favor of a number of regional currencies.
“The role of bilateral trade will increase, with settlements between countries in their national currencies. In contrast to the global capital market, local regional markets will develop,” says the report of Credit Suisse.