Morgan Stanley believes Bitcoin, CBDCs have the potential to ‘de-dollarize’ the world


Wall Street giant Morgan Stanley believes the rise of Central Bank Digital Currencies (CBDCs) and digital assets like Bitcoin and stablecoins could potentially disrupt the U.S. dollar’s longstanding dominance in the global economy.

The lender made the analysis in a recent report titled “Digital (De)Dollarization?” — which highlights the disproportionate influence of the U.S. dollar in global finance and the existential threat posed by digital currencies and CBDCs.

How To Get Free Crypto  

Dollar’s slipping dominance

Despite the U.S. contributing about 25% of global GDP, the dollar constitutes nearly 60% of global foreign exchange reserves. However, this dominance is now under scrutiny, partly due to the U.S.’s growing twin deficits and strategic economic sanctions prompting nations to seek dollar alternatives.

The European Union and China are making strides to bolster the euro and yuan in international trade. The EU focuses on enhancing the euro’s role, especially in energy and commodity transactions. China is promoting the yuan through its Cross-Border Interbank Payment System, challenging the dollar-centric payment systems.

Meanwhile, other countries have created the BRICS organization to develop non-dollar methods of trade among each other, while Russia has been looking into using private digital currencies for some cross-border trades.

The report suggests that the ascent of digital currencies and CBDCs represents a significant challenge to the traditional dominance of the dollar in international finance. These emerging technologies offer more efficient, transparent, and accessible financial solutions, potentially reducing reliance on traditional banking systems and the dollar in international transactions and reserves.

Coinbase Banner  

Rise of the digital currencies

The report analyzes the potential impact of these digital currencies and CBDCs on the global financial system. It posits that as these technologies gain acceptance and usage, they could offer practical alternatives to traditional cash and fiat currencies.

This shift is poised to reduce the reliance on the dollar for international transactions and central bank reserves, potentially altering the balance of global economic power.

According to the report, Bitcoin, with its decentralized nature and capped supply, has evolved from a niche online concept to a globally recognized asset, with an adoption rate of 106 million owners worldwide. The flagship cryptocurrency’s expanding global reach and national adoption by countries like El Salvador as legal tender signals a historic shift in national financial strategies.

Morgan Stanley also pointed to the growing usage of stablecoins, which accounted for transactions amounting to $10 trillion in payments in 2022, as another sign of the shifting landscape. Stablecoins are increasingly becoming the go-to payment method due to their 24/7 access and instant settlement.

FreeBitcoin Banner  

Furthermore, their integration into payment systems of companies like Visa and PayPal is another sign of their growing importance in the global financial ecosystem.

CBDCs could supplant the dollar

The report also delves into the rapid development of CBDCs and their potential impact on the dollar’s market dominance.

Over 111 countries are exploring these digital versions of their national currencies, which could revolutionize financial systems. China’s digital yuan and Brazil’s DREX are examples of how CBDCs could facilitate more efficient and inclusive financial transactions.

According to Morgan Stanley, the rise of CBDCs could streamline cross-border payments, reducing reliance on traditional financial intermediaries like SWIFT and, by extension, the use of dominant currencies like the dollar.

The report points to the mBridge project, involving central banks from multiple countries, as an example of how CBDCs can facilitate efficient cross-border settlements using smart contracts.

Morgan Stanley’s analysis points to a future where CBDCs and other private digital currencies offer viable alternatives to traditional cash and fiat currencies. This shift could gradually reduce the dollar’s role in international finance, influenced by digital innovation and shifting geopolitical dynamics.

Go to Source
Author: Assad Jafri


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.

You May Also Like

More From Author

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