Dollar Dominance Fading Amid Growing China Trade, Russia Sanctions Risks, Ray Dalio Says – Economics Bitcoin News

Fewer nations are willing to hold the U.S. dollar as America’s share in the global economy becomes smaller while China’s role in international trade expands, billionaire Ray Dalio noted. The founder of the world’s largest hedge fund also said that Western sanctions on Russia have highlighted new risks of keeping dollar assets.

‘Dollar Is Debt,’ Central Banks Are Less Inclined to Hold It

The importance of the U.S. fiat in international trade is decreasing and as a result the dominance of the dollar is fading, billionaire investor Ray Dalio said in recent interviews on Youtube. He also pointed out that sanctions imposed on Russia over its invasion of Ukraine have exposed new threats for governments keeping assets in the American currency.

How To Get Free Crypto  

Central banks around the world are less inclined to hold the greenback, the founder of Bridgewater Associates remarked on the Julia La Roche Show last week. “Dollars are debt. In other words, when one holds a dollar — a central bank — they hold a debt asset,” he stated, according to excerpts quoted by the Business Insider on Tuesday.

Dalio elaborated that previously nations have been willing to expose themselves to such debt so that they can trade globally as the dollar has been widely used in international transactions. However, with China promoting the use of its currency, the yuan, in trade deals with countries like Brazil, Kazakhstan and others, the need for the dollar may decrease in the future.

At the same time, Western financial restrictions on Moscow have been pushing the Russian economy towards the yuan while Russia also saw $330 billion in currency reserves frozen, further preventing it from transacting in dollars or euros. Dalio believes that the sanctions have increased the perceived risks associated with dollar assets. He concluded:

So for those reasons, there’s less desire to hold U.S. dollar-denominated debt, which means yes, less U.S. dollars. So the supply-demand picture is worsening, particularly as we continue to have to sell them internationally to fund the deficit.

In an interview for Tom Bilyeu’s Youtube channel posted on Saturday, Ray Dalio again highlighted the weaponization of the U.S. dollar as a factor for its diminishing role. “The United States’ greatest weapon to use, as distinct from military weapon, is sanctions. So, sanctions means you freeze assets, those assets are the bonds. That happened with Russia and there are threats of it with other countries, China and so on,” he explained.

Coinbase Banner  

A number of public figures have recently acknowledged that sanctions policies can hurt the hegemony of the greenback, from Fox News host Tucker Carlson to U.S. Treasury Secretary Janet Yellen. Within the next decade, the U.S. dollar will play a much less dominant role than it is today, partly due to its weaponization, renowned economist Jeffrey Sachs was quoted as saying earlier in April. Their comments come amid efforts for “de-dollarization” led by BRICS, of which Russia and China are members.

Tags in this story
billionaire, bonds, China, Currency, Dalio, de-dollarization, debt, Dollar, Fiat, Greenback, international trade, Investor, Ray Dalio, reserve currency, reserves, restrictions, Russia, Sanctions, trade, transactions, United States, US, US Dollar, Yuan

What are your expectations about the future role of the U.S. dollar in global trade and economic relations? Share them in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

FreeBitcoin Banner  

Read disclaimer

Go to Source
Author: Lubomir Tassev

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.