American economist Barry Eichengreen warned that US President Donald Trump's policies could undermine the dollar’s status as the world’s reserve currency.
Eichengreen believes that the dollar has always owed its dominance and strength to trade, reliable alliances, and top-rated institutions. However, the economist argues that Trump has become overly focused on reshaping relationships with everyone, from China to Europe, and is also attempting to change the rules of the game in the economy. As a result, the US dollar could lose some of its influence on the global scale.
Barry Eichengreen pointed out that specialists usually explain the dollar's leading position simply: the US has a massive GDP and the largest financial market in the world. However, he added a note of caution, saying that the dollar's role on the global stage depends not only on macroeconomic data but also on the values and institutions that the president is now enthusiastically trying to "reformat."
Meanwhile, Trump seems determined to tackle the crypto issue. He has already declared himself the first "crypto-president" and proposed bills to regulate the crypto market in the US. On the one hand, it sounds ambitious. On the other hand, the message of economist Eichengreen is that an obsession with Bitcoin should not turn into neglect of the good old dollar.
