Crypto Currencies rise against The Dollar Supremacy
The U.S Dollar had been the world favorite reserve currency for decades due to a number of reasons most importantly; the political influence & influence of the USA as a super power leading and impacting the political scene since the end of the world war 2 and the continues efforts and intervention by the US government if needed to assure its currency dominance as it doesn’t only generate profits for the US treasury through the federal reserve but also it provides a vital pressure card that can be used to influence overseas economies either through financial aid or sanctions, the stability and prosperity of the US economy, the wide use of the currency especially among emerging markets as a suitable alternative, and it is wide perception as a reliable transactional currency replacing the national weak currencies in volatile economies.
Crypto currencies are considered by many the digital gold, although being volatile and unstable in value, but it provides the people with a mean of financial freedom, a shield from currency inflation and deflation, a quick path for wealth and recently plenty of goods and service providers are accepting it as a form of payment. On the long term and if more people joined the crypto currency ever-growing list of users the world will be dealing with more monetary units than ever and this impact the current leading currencies value especially the dollar as the world’s strongest currency, as the number of the dollar transactions will decrease worldwide with a big share being devoured by the crypto currency’s transactions.
The second group firmly believe in the strength of the U.S dollar as a currency, and they have little to no belief that crypto currencies will have any noticeable effect on the dollar as a leading currency.
Historical Competition and Nonuniform currency argument
The U.S.A in general and the U.S dollar in specific had witnessed various types of competition and currency wars through the course of time, and the dollar always managed to lead and maintained its pristine reputation, as investors are always searching for a stable value storage for their hard-earned money, and as the dollar is a currency that challenged the course of time and are widely popular and acceptable in almost every location in the world, it will always remain out of competition.
Experts had also referred to the branded notes before the civil war in the USA as a reference to further cement their argument, various banks had their own branded distinct notes of the dollar that was traded a different discounts and the regular population wasn’t in favor with this practice, as it represented a challenge for both the initial and end users for the confusion it created majorly in valuation and means of payments, and they link it to the crypto currencies scenario as firms will not be easily able to accept numerous crypto currencies as a form of payment especially with a volatile crypto coins valuation that can either proof extremely profitable or disregarded as a massive loss in the short and long term.
In addition, despite the crypto currencies rising popularity and because of its extremely volatile nature, the crypto currencies are failing to acquire the trust of most people as a safe saving/investment or even day to day usage currency, as regular currencies and in this case the U.S dollar are being backed by a strong institution represented in the central bank, that had created solid U.S dollar payment systems which witnessed decades of continues improvements, tweaks and further utilization to expand the currency potential and strengthen its presence either internally or externally.
Furthermore, various countries are yet to accept or legalize the wide usage of crypto currencies, and if the various governments in general and the USA government in specific forecasted a major risk to their currency, we shall expect an entry of the power narrative into the equation and an elimination war against the crypto called either for their mining practices, the owners of the various coins, the environmental impact of the mining and the illegal under the radar usage of the crypt coins.
In short, crypto currencies have a very long way to go to gain most of the people trust before it grasps a piece of the chess board that is entirely owned by the US dollar, especially with more central banks are leaning towards issuing their own digital coins and utilizing the same blockchain technology in their favor, not to mention that the usage of technology even if simplified is still a major challenge in numerous spots around the world.
crypto currencies are rapidly growing as a source of a decentralized monetary transactional form which is far from the unfavored control by the central banks, and although it had been around for almost a decade the U.S dollar had sustained it is spot as the world choice of the preferred currency and time will only tell if the crypto currencies will have a tangible impact of the U.S dollar.
- Zeyad
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