56% of Respondents Say De-dollarization Would Impact the Global Economy

De-dollarization involves reducing or eliminating the U.S. dollar’s dominance as the world’s reserve currency. In detail, the process involves countries moving away from using the U.S. dollar and replacing it with their own national currencies or other forms of international currency.

There are several reasons why countries would adopt this; one of the main reasons is to reduce their dependence on the U.S. economy and avoid being subject to U.S. sanctions or other foreign policy measures. Another is the divergence of U.S. monetary policies from those of other countries.

Real Research launched a survey seeking public opinion on the impacts of the de-dollarization trend. The survey aimed to gather information about the impact of de-dollarization on the global economy, possible benefits of de-dollarization, and more. Here’s what the survey revealed:

Key Highlights:

• 56% feel de-dollarization will impact the global economy.
• 55% feel de-dollarization will lead to increased use of cryptocurrencies and other digital currencies.
• 35% say that de-dollarization would disrupt the global financial system and create uncertainty during the transition period.

De-dollarization has gained considerable momentum recently as several countries are exploring alternative currencies such as the euro, yen, and yuan. The responses revealed that 62% were aware of this, while 30% were vaguely aware. 8% were unaware. Moreover, respondents were asked if de-dollarization would have an impact on the global economy. 56% felt de-dollarization would impact the global economy, while 18% felt it wouldn’t. 26% are unsure.

The survey then asks how the de-dollarization trend would impact the balance of power among nations. As shown in Fig 1 above, up to 28% feel it will lead to greater economic cooperation among countries, while 21% feel it will lead to increased economic competition among countries.

A further 20% of respondents say de-dollarization will lead to a more multipolar world with several countries holding economic influence, while 18% suggest it will shift the balance of power away from the U.S. and toward other countries.

13% say it will not significantly impact the balance of power among nations.

Benefits of De-dollarization

The survey then reveals that de-dollarization has several benefits, such as reduced dependency on the U.S. economy (33%), diversified risks (24%), strengthened sovereignty (24%), increased global acceptance of alternative currencies (14%), and higher transaction costs for businesses and consumers using alternatives.

Disadvantages of De-dollarization

In contrast, the survey also asked respondents about the disadvantages of de-dollarization; 37% say it could result in increased volatility in currency exchange rates and financial markets, while 35% say it disrupts the global financial system and creates uncertainty during the period of transition.

15% of respondents also feel it would subsequently reduce trust in the U.S. as a reliable economic partner. While 9% say de-dollarization would result in higher transition costs for businesses and consumers using alternative currencies.

Would De-dollarization Likely Lead to Increased Use of Crypto?

Speculations about the use of crypto and other digital currencies emerged when there were talks about de-dollarization. Respondents were asked if they thought de-dollarization would lead to the use of other currencies. A majority of 55% said yes, with only 22% saying no and 23% being unsure.

Next, the survey asks whether respondents are likely to invest in alternative currencies, such as cryptocurrencies, due to the de-dollarization trend. In response, 44% said they highly likely would, while 41% said it was somewhat likely. Only 12% say it is somewhat unlikely, and 3% say it is highly unlikely.

The Role of Technology in Facilitating the De-dollarization Trend

Next, the survey asked respondents’ opinions on what role technology plays in the de-dollarization trend. 18% say it promotes the use of blockchain technology to create more decentralized and transparent financial systems. Moreover, 14.62% said it enables faster and cheaper cross-border transactions, while another 14.62% felt it allows the creation of new digital currencies that can be used as an alternative to fiat currencies.

Further, 14.6% say it promotes the development of international standards for alternative currencies and financial systems. 13% also feel it would provide better access to financial services for people in countries that are de-dollarizing their economies, while 33% say it would help businesses and individuals easily track and manage transactions in different countries.

13.2% had ‘others’ to say.

What Should Governments Do to Manage Risks Associated with De-dollarization

Given the disadvantages of de-dollarization, are there any potential steps the government could take to manage the risks involved?

18% suggest coordinating with other countries to create international standards for alternative currencies and financial systems. 15% suggest investing in technological infrastructure to reduce transaction costs and facilitate the adoption of alternative currencies. Another 15% suggested addressing the impact of de-dollarization on the domestic economy. 14% add that the country should diversify its currency reserves to reduce dependence on the U.S. dollar and promote stability.

11% finally suggested promoting the development of alternative payment and settlement systems.

13.5%, however, have ‘other’ things to say.