For decades, the world’s de facto currency of record has been the US dollar. This has meant that commerce, even between two countries that don’t use the dollar as their currency, tends to be conducted, at least in some roundabout way, in dollars.
Russian officials say that this could soon change, and that they support the idea of conducting bilateral trade in the national currencies of whoever they’re trading with, instead of the US dollar. Kremlin officials say this idea needs work before being implemented.
Ever-increasing US sanctions against Russia could make this more convenient, as access to US dollars on the global foreign currency markets isn’t always convenient. In the case of trade with countries the US is trying to ban trade with, like Iran, it’s virtually impossible.
Turkish officials say they’re on board for the idea, with President Erdogan saying Turkey is already prepared to conduct all trade with China, Russia, and Ukraine through their respective currencies. This move comes amid US sanctions and tariffs on Turkey, which have led to the collapse of the Turkish lira.
There is always gold and silver. Old time Russia used tungsten. But the greatest opportunity for those screwed by the dollar interests would be to go a block-chain currency like Bitcoin. If they did, Jamie Dimon would have a cow.
Blockchain tech may have a way to go before it’s really fit for application as a de facto competing reserve currency. And there are some problems from a state’s point of view — a really good cryptocurrency would be hard to track/tax.
Mr. Knapp – “a really good cryptocurrency would be hard to track/tax” – or sanction. These are the attractive parts of blockchain tech. Hope it happens.
Me too! A robust, trustworthy, non-government-controlled cryptocurrency that replaced the dollar as the de facto global “reserve currency” would be a great thing.
It’s possible that Trump may see the dollar’s reserve status as a negative. I’ve read some speculation to that effect lately, but personally I’m not so sure.
Blockchain could be first implemented to handle large transactions between financial institutions. Iran is doing this, iirc. Logging and reporting the transactions is trivial in comparison to getting bankers to go along with it.
IMO, all for-profit banks should be abolished in favor of a non profit credit union model of doing business. Abolish the Fed and take back the central bank/money printing.