The Fed has included EURO, CNY and cryptocurrencies in competition with the US dollar

The Board of Governors of the Federal Reserve System has published an extensive report in which it also mentions that cryptocurrencies may threaten the dominance of the dollar.

The Fed has included EURO, CNY and cryptocurrencies in competition with the US dollar

The Federal Reserve System of the US and its Board of Governors shared an extensive report on its website entitled "The International Role of the U.S. Dollar", which also paid attention to what could reduce the dominance of the US dollar.

This report mentions that in modern history there was only one case when the U.S. dollar lost its status as an international and dominant currency, and that was when it was replaced by the British pound. However, the US dollar has regained its lead after the financial crisis associated with the First World War, and there are currently only a few factors that could threaten it.

According to the authors of this article, in the long horizon, there are several important factors that support the use of other currencies, including increased European integration, the growth of the Chinese economy, but also the changing payment environment led by cryptocurrencies.

A shifting payments landscape ​could also pose a challenge to the U.S. dollar's dominance. For example, the rapid growth of digital currencies, both private sector and official, could reduce reliance on the U.S. dollar.

In the context of digital currencies, the U.S. Federal Reserve System also points out that changing consumer and investor preferences combined with the possibility to choose a new products is the greatest danger, as it „could shift the balance of perceived costs and benefits enough at the margin to overcome some of the inertia that helps to maintain the dollar's leading role.

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