Blockchain offers global governments an alternative resolution to a secure financial system, according to Brad Garlinghouse, the CEO of Ripple.
Supporters of cryptocurrency have long wanted to show the weakness of fiat currencies. The global health crisis shakes the world, and geopolitical turmoil makes them talk with the mainstream more than ever.
In a tweet posted on August 3, Brad Garlinghouse, CEO of Ripple, committed to a recent Bloomberg article that explores various possible alternatives to the dollar as the world’s reserve currency.
The article covers gold, some of the main fiat currencies – yen, yuan, and euro – exclusive withdrawal rights issued by the IMF and ending with digital currencies.
Blockchain being seriously considered by most of the governments.
Garlinghouse said the dynamics behind digital currencies after 2020 were questions about “confidence in the financial system at the end of the day.”
Brad stated, “As the global population continues to lose confidence in fiat currencies (as we see in the US dollar), they will choose to diversify.”
“Our future global financial system will do the same thing,”
His statement is close to Fundstrat’s Tom Lee, who told Bloomberg that “trust in the traditional financial system is broken – that’s the problem. The less you trust the dollar, the more you want alternatives.”
Against the background of economic turmoil, divisions in the geopolitical order since 1989, and tensions in global trade and investment, Garlinghouse argues that the inherent benefits of cryptocurrency are more apparent than ever before:
“A year ago, many relied on cryptocurrency as a scam, and now most statesmen take the blockchain seriously. It’s about friction (that is, settlement, transparency, etc.) Previously it wasn’t easy to solve. Cryptocurrency is about 80% higher, while the USD is going up 3% since the beginning of the year. “”
The development of China’s central bank’s digital currency is a prime example of directing growing power to innovative technology to improve their game in the geopolitical, monetary, and technological competition of the new century.
Pandemic, crisis, conflict, and tension.
The COVID-19 economic crisis began with violence for the US dollar, and investors fled to their original “sanctuary,” – which resulted in an extraordinary rally of 9%.
However, this excellent pattern was stopped when the crisis broke. July is the worst green month in ten years. The recent decline reflects rising diplomatic tensions between the United States and China and an uncomfortable solution representing the dominance of the dollar in a turbulent and multipolar world that was eradicated by the pandemic.
As Garlinghaus notes, all analysts agree that dollar hegemony is unlikely to fall soon.
The dollar’s position as the “backbone” of the global financial infrastructure “will not soon disappear for gold/yuan/cryptocurrency / other assets,” Garlinghouse wrote. “But is he weaker today?” Yes “.
The misdirected US response to the public health crisis and domestic polarization may have contributed to the loss of its soft strength. Investors in the US bond market appeared to be raising prices in a disappointing recovery in the US economy.