Matthew
@matthew
USDC/T tradeoff thoughts: As currencies devalue relative to the dollar, more people around the world look to save in dollars as a way to protect their money from local inflation. This in turn devalues currencies relative to the dollar, and in turn causes the demand for dollars to rise dramatically over time. On the one hand, this is good for America because it extends soft power— billions around the world holding their net worth in dollars makes them more likely to align with American values and participate in the American-led economy. It also makes it more difficult for competing systems such as BRICs to pose a real threat. On the other hand, the trend causes US-made goods to rise in price relative to goods produced in other countries (like China), worsening American manufacturing crisis and furthering the trade imbalance that DJT seems intent on reversing. Has anyone thought about this? Am I missing something?
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Ben
@benersing
I’d bet there’s a 99.9% likelihood of a CBDC, possibly in the next four years. I can’t envision a world where USDC/T succeed for long in a world with a CBDC. If markets feel similarly and anticipate a decline in USDC/T usage, then they could experience significant sell pressure which would likely destabilize the peg.
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gegè
@18kgoldsouvenir.eth
even with CBDC, I think USDC/T will still b very attractive for the same reasons as now: very easy access for non-us citizens?
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Matthew
@matthew
agree re your second point, but why 99.9% confidence?
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