The U.S. dollar dominance as the global reserve currency of choice may be coming to an end, according to Robert Kiyosaki, author of the best-selling personal finance book series “Rich Dad Poor Dad”.
“U.S. [dollar] hegemony [is] ending,” Kiyosaki said in a tweet on March 15. He was referring to reports that Saudi Arabia may start accepting the Chinese yuan for oil sales to the vast Asian country instead of the dollar.
“United States less of a world power. Just what happens next is in question,” he added. As President Joe Biden presides over geopolitical shape-shifting as the poster boy of Western democracy, the most significant clap-back yet may be loss of confidence in the U.S. dollar.
Dollar weaponization
Used as an international trading currency since the end of the Second World War, the dollar has been politically weaponized in the service of American interests.
Now, other global powerhouses are betting on taking back control of their economies by phasing out the dollar as the de-facto medium of global trade.
Over the past few years, China, Russia, India, Iran, and Turkey – countries predominantly on the receiving end of U.S. economic sanctions and trade conflicts – have started to cut back their dependence on the dollar.
In Saudi Arabia, Chinese officials have been in discussions about yuan-priced oil contracts since 2016. Those negotiations have reportedly gone a gear up in recent weeks in the wake of rising Saudi concerns over America’s commitment to the kingdom’s security.
China’s international ambitions include wider circulation of the yuan.
Unlike other dollar skeptics, India does not come across as a U.S. rival, but the populous country is taking measures to ensure that American sanctions do not get in the way of its trade partnerships.
The Asian giant had to switch from the dollar to the rupee in 2018 for a military procurement from its BRICS partner, Russia, as well as for sanctions-hit Iran’s crude oil.
A currency swap agreement between India and United Arab Emirates is part of a trend that China and Russia have utilized to do away with the U.S. dollar as a medium of exchange.
Following a series of tough sanctions that have isolated Moscow, there’s some concern that the sweeping measures could accelerate the demise of the dollar in global trade.
‘Bitcoin is a safe haven, fiat is fake’, says Kiyosaki
While cryptocurrency has not been tabled as an alternative, loss of confidence in the dollar is symptomatic of the political entanglements of fiat currencies and places decentralized assets like bitcoin on the right side of history.
Robert Kiyosaki, the American businessman, and author, said the war in Ukraine had given “rise to crypto as a safer haven than government fake fiat currency.”
The best-selling author has previously accused the U.S. central bank, the Federal Reserve, and the U.S. Treasury Department of “destroying the dollar” and sending “billions of savers and uninformed to financial hell.”
While Kiyosaki did not explain how the dollar was destroyed, he did point to an instance that investors would be better suited towards – encouraging investors to save bitcoin, along with gold and silver, so they can “go to financial heaven.”
Dollar facing resistance in Africa
In Africa, where issues of aid are tied to a series of often unreasonable demands, the dominance of the U.S. dollar as a settlement currency is already being challenged by emerging payment methods in financial technology and by native African fiat currencies.
During the four years to 2017, fewer people in the continent of 1.2 billion transacted via the dollar than with their local currencies or mobile money, and perhaps cryptocurrency.
Crypto has in the past emerged as a solution to situations where other actors are victims of traditional financial instruments and the complicity of payment processors with powerful state interests.
Replacement of the U.S. dollar with other fiat currencies may facilitate similar problems in the long term, all of which quietly makes the case for censorship-resistant cryptocurrency that is immune from international meddling.
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