Economist Nouriel Roubini predicts that a bipolar monetary regime would replace the dominance of the US dollar.
Economist Nouriel Roubini has predicted the eventual demise of the US dollar, although he is often known for inconsistent predictions.
The dollar has been the dominant currency for decades. Most nations store some of their reserves in dollars. It is also widely used as a mode of exchange for international trade.
Nevertheless, the economist Roubini predicted that the reign of the unipolar currency would soon end. The economist is often referred to as “Dr. Doom” after he predicted the collapse of the 2008 housing bubble.
“China’s yuan will end US dollar dominance and create a bipolar currency system in the next decade,” says ‘Dr. Doom’ Nouriel Roubini.
The Acceleration of De-Dollarization
Roubini shared his latest views in which he mentioned that a bipolar currency regime would replace the dominance of the dollar. He explained this in the following terms:
“Given the increasing militarization of the dollar for national security purposes and the growing geopolitical rivalry between the West and revisionist powers like China, Russia, Iran and North Korea, some argue that de-dollarization will accelerate.”
Following US sanctions, Russia and India are also winding up their rupee (INR) trading. According to a Business Standard article, India is talking to Southeast Asian, African and Latin American nations to start trading with INR.
CBDD Will Challenge USD, Roubini Says
The crypto skeptic has commented that the emergence of central bank digital currencies could lead to a multipolar monetary regime. Governments around the world have been pushing their versions of CBDCs for the past two years.
China recently promoted its digital yuan during the Lunar New Year through initiatives totaling more than $26.6 million. Last month, the Central Bank of Saudi Arabia announced that it is experimenting with a CBDC pilot program.
The economist says that the United States’ strict policies of imposing sanctions on its rival countries will diminish the attractiveness of the dollar. America’s rival China, on the other hand, is pushing for the increasing adoption of the renminbi (RMB) as the world’s reserve currency.
US rivals Iran and Russia are reportedly launching a gold-backed CBDC to facilitate cross-border payments.
Do Not Always Trust Roubini
It’s worth noting that Roubini has often been inconsistent with his predictions. After predicting the collapse of the housing bubble, the economist forecasted that the S&P would fall 20% in May 2010, but the index was up more than 20% in one year.
In August 2020, Roubini wrote that reports of the dollar’s demise are “greatly exaggerated.” Yesterday, though, he predicted the end of the dollar’s “exorbitant privilege” in the FT article.
By Audy Castaneda
