Are cryptocurrencies threatening the dominance of the dollar?

DUBAI – The rapid rise in digital and cryptocurrencies threatens the continued dominance of the US dollar in global markets, according to a new study by the Federal Reserve.
Cryptocurrencies and government-backed digital currencies, such as bitcoin, may reduce their dependence on the US dollar, as Federal Reserve economists Carol Berthaut, Bastian von Beschwitz and Stephanie Gorgor wrote in their paper that “the US dollar is an international stock.” According to the “Arab Gateway” report. For technical news.
They point to a shift in consumer and investor preferences, while new products shift the perceived balance of costs and benefits.
“It is not possible that technology alone can change the landscape to compensate for the long-term causes of the dollar’s dominance,” the paper added.
The Federal Reserve is expected to issue a separate statement soon on whether a central bank should issue a digital currency.
But key Federal Reserve officials disagree. While Fed Ser Jerome Powell’s somewhat openness to central bank digital currencies, other central bank officials, such as Vice President Randall Querrels, were more skeptical.
Quarles said in July that while the public interest on the digital dollar is at its peak, the US dollar is “highly digital” and serves the nation and the economy well.
In addition to cryptocurrencies, the paper by federal economists highlights two nearby challenges affecting the international position of the US dollar. The first is the continued integration of Europe into a large economy with strong institutions and free trade. Economists in particular pointed to the EU’s decision to provide collectively supported credit during the height of the epidemic.
They added: “As financial integration progresses and the large and liquid market for EU securities develops, the euro will become more attractive as a reserve currency. This consolidation can be accelerated by the infrastructure of the EU sovereign credit market and the introduction of the digital euro.
The other potential risk, according to economists, is China’s rapid growth. This is a country that is expected to be nominally higher than the US GDP by 2023.
But they are optimistic that the US dollar will remain attractive. They added, “The dollar is likely to be the dominant global currency in the world in the future.