The USD is a global reserve currency. Therefore, while many currencies weaken during times of crisis, the US Dollar not only stays put but grows stronger. This has been happening over and over, so it’s expected that in the coronavirus recession, USD should behave the same way. And it does stand strong at the moment. However, the long-term forecast for this currency isn’t so bright. It’s quite possible that with the rise of digital payments in the pandemic, a crypto reserve currency is in our future.
Is the USD Truly Weakening in the Coronavirus Crisis?
At the moment, the USD is the strongest currency in the world. It’s a simple truth. And this situation won’t change for some time yet, regardless of how the US economy is faring. The reason for this is the fact that the US Dollar is the reserve currency of the world. Therefore, when the volatility of a global recession hit, everyone flocked to the Dollar.
Investors, business owners, and regular everyday people are putting their trust and money into the USD. They are doing it in order to hedge against the difficult economic times ahead. This strategy has worked for many during previous recessions, so why would this one be different?
So far, there is nothing different about the coronavirus recession in regards to the USD situation as a dominating currency. Also, everyone who can, such as expats and global businesses, are capitalizing on it. You can see this from the growing demand in USD transfers. Everyone wants to have some security in these uncertain times, and it seems that the Dollar is it.
All things considered, it should be a stellar time for the American Dollar, right?
Unfortunately, the current crisis is very different from a regular economic recession. It’s not only the coronavirus pandemic that’s affecting the current situation. The US economy is facing pressure from multiple sides and, therefore, the USD is in danger of weakening and collapsing along with it.
For now, its status as the global reserve currency is preventing this from happening. However, this “protection” won’t last forever. And should the USA not recover well from this pandemic, the Dollar might lose its position entirely.
Will the USD Lose Its Position as the Global Reserve Currency?
For all its seeming strength, the USD is in a difficult position at the moment. There is no doubt that it will remain strong for a while. However, once this crisis is over, the world will be changed irrevocably. And one of those changes might be the fall of the US Dollar from the position of global reserve currency.
The main reasons for this possibility are:
- The US economy is weakening fast.
Millions of people have already lost their jobs, and more might follow in the next few months. As such, the economy cannot recover the losses incurred during lockdowns. And the longer it takes to do this, the harder the situation gets.
- Difficult trade relationships with China.
It’s a fact that China’s economy hasn’t been stronger than that of the USA prior to this crisis. It’s not stronger now, as well. But while China is rapidly recovering, the US is facing a threat of a second wave of the pandemic. Once that strikes, the economy will suffer much more. Meanwhile, China is gaining rapidly and could become the greatest global economy soon. Should this happen, the mantle of the world’s reserve currency might fall to the Yuan.
- The need for digital currencies is growing fast.
One factor that can help bring down the USD is that the world is about ready to embrace the use of cryptocurrency. This crisis has led to an unprecedented rise in the use of fintech apps. It jumped up by 72% in a single week at the start of the pandemic. And while digital payments have been growing more popular before, now they’ve become a necessity. It’s reasonable to assume that adopting crypto is the next logical step in the global monetary development.
Can the Next Reserve Currency Be a Cryptocurrency?
Crypto might not have made a breakthrough yet, but it’s been steadily growing in popularity in the last few years. The COVID-19 pandemic has advanced this growth by leaps and bounds. Many financial expert advisors recommend investing in cryptocurrency today.
If nothing else, this will be a good hedging tool for panicking investors.
It’s true that the Bitcoin value dropped dramatically at the beginning of March. This made many people doubt that crypto might become a true hedging tool. However, since then, BTC has already doubled in value. This recovery rate indicates that while Bitcoin isn’t 100% safe, it’s still rather recession-resistant.
Meanwhile, governments the world over are understanding that instead of a luxury, digital payments must become the norm. It’s a healthcare requirement, as well as a logical choice. The increase in the number of digital payments during the lockdown period is proof that people like this method. This means that when the social distancing regulations are lifted, people won’t just go back to using cash.
Should cash payments become obsolete, a digital currency will be a necessity. China’s government seems to understand this clearly. Therefore, the country is reported to be in the process of the development of digital yuan. There is no release date for it yet, but this type of crypto might be exactly what’s necessary.
Nothing changed about the fact that governments are against crypto because they can’t control it in any way. A digital currency that’s tied to the country itself would be a different case. However, now it’s too early to say what will come from this situation in the long-term. But one thing is sure, if there is no digital version of the USD in circulation when other such crypto variations begin to appear, the Dollar will have no chance.
Final Thoughts: What Will the Monetary World Be Like After the Pandemic?
The US Dollar is a very strong currency. There is no denying the fact that even if it does lose its position as a reserve currency, this won’t happen fast. However, the situation we are seeing today makes this future a distinct possibility.
The main problem is that despite the usual strengthening of the currency during a global recession, it’s still weak. Numbers might not reflect this at this moment. But major economic issues plaguing the US are concerning.
The tension in the US-China trade relationship doesn’t help America in any way. In fact, it’s setting the US economy, and therefore currency, in direct competition with China. Sadly, this is a fight that the US might not win. As Chinese businesses are reopening after the virus, America is set to face the second wave.
Should this happen, the US economy, which is already struggling, will be crippled. At that point, the benefits that come from the USD being a global reserve currency won’t be able to sustain it. Therefore, other currencies, such as the Yuan, might push to the top position as the reserve.
However, there is also a chance that this drastic monetary and economic situation will give cryptocurrency the push it needs. The benefits it offers as both a hedging tool and tool for quick global payments are numerous. And the need for easy digital payments is skyrocketing. Crypto has the potential to resolve many issues for many economies. The question is whether governments will take the step of truly adopting digital currencies.
Featured image: Unsplash
Statements & Policies
Summary of Disclosures
By accessing CryptoCurrencyNews.com (hereinafter referred to as “this website”) you hereby affirmatively represent to Market Jar Media Inc. (“Market Jar”) that you have read and understood the entirety of the following statements and policies
If you do not agree to these Statements & Policies, you may not use the CryptoCurrencyNews.com website and affirmatively acknowledge that you have not used or viewed content on the CryptoCurrencyNews.com website
Market Jar is neither an investment advisor nor broker-dealer. The information presented on the CryptoCurrencyNews.com website is provided for informative purposes only and is not to be treated as a recommendation to make any specific investment. No such information on CryptoCurrencyNews.com constitutes advice easeor a recommendation.
The opinions and analyses included in this website are based on factual information obtained from public filings and other sources deemed to be reliable and are provided “as is” in good faith. Market Jar makes no representation or warranty, expressed, implied or statutory, as to the accuracy or completeness of such information, which may be subject to change without notice.
Safe Harbor Statement
This website contains forward-looking statements applicable to future anticipated performance, growth, and plans of the companies on whose behalf we disseminate information. As such, any specific statement on this website that are not statements of factual history should be viewed as forward-looking statements. These forward-looking statements can be generally identified through phrases such as “possibly”, “anticipates”, “estimates”, “potentially”, “intends”, and other words of similar connotation. Statements in this website that speak to a company’s business intentions, objectives, strategies, and or intentions should also be viewed as forward-looking statements. All forward-looking statements are subject to uncertainties that could result in different outcomes than those described in forward-looking statements.
By accessing this website, you indicate your agreement to these Statements & Policies. You affirmatively represent that you have read and understood the entirety of the following Statements & Policies. We reserve the right, at our discretion, to change, modify, and add or delete portions of such Statements & Policies at any time.
The entire contents of this site are protected by worldwide copyright laws and treaty provisions. The contents of this website are for non-commercial individual reference only and may not be used for other purposes or otherwise copied, displayed, downloaded, distributed, modified, reproduced, republished or retransmitted without the express written consent of Market Jar.
Information subject to change
Information on this website is updated regularly by Market Jar without notice. However, the information is not intended to be complete and cover all matters and developments concerning the company and its activities and the company cannot guarantee either the currency or completeness of the information at all times and assumes no responsibility in this regard.
All stock quotes are delayed at least 15 minutes unless otherwise noted. All stock quotes or cryptocurrency price quotes (collectively “Quotes”) and historical price data are provided by a third party service provider and are provided for information purposes only and not for trading purposes. Market Jar makes no representation or warranty regarding the accuracy or completeness of any Quotes or historical price data and has not verified the adequacy, accuracy or completeness of the information provided on this website. We strongly recommend that you seek independent professional advice before investing in any companies, stock or cryptocurrency mentioned in the articles on the website.
Notice to investors
The information on this website is not intended as a solicitation for funds or an offering of securities and should not be construed or interpreted as such. The information on this website is not intended to modify, qualify, supplement or amend information disclosed under applicable securities legislation of the U.S. or Canada. No securities commission or other regulatory authority in either the U.S. or Canada has in any way passed upon the information on this website and Market Jar makes no representation or warranty to that effect.
Market Jar supports the use of social media, however any third party content posted through social media channels maintained by us should not be taken as an endorsement of such information. Links to websites and other resources operated by third parties (“Third Party Information”) other than Market Jar are provided solely as a convenience to the user. We do not control such Third Party Information and are not responsible and disclaim any liability for the content, products, services or information offered by any third parties. The inclusion of links to such Third Party Information on the page does not imply endorsement of any content, products or services offered, advertised, endorsed or promoted by any third party, or of any company or person. If you decide to access any Third Party Information or acquire any third party products or services, you do so entirely at your own risk, and you may be subject to the terms and conditions and the privacy policies imposed by such third parties. Third party sources generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. Although believed to be reliable, management of Market Jar has not independently verified any of the data from third party sources.
Ownership and Interests
Cryptocurrencynews.com is owned by Market Jar. Market Jar, and its directors and officers do not own any of the cryptocurrencies or tokens mentioned in this article.
Amounts Paid To Market Jar Media Inc.
Market Jar Media Inc. has or expects to receive the following amounts indirectly from the issuer’s set forth below.
Sponsored Posts = $197 USD
Press Release = $197 USD
Amounts noted above were received or expected to be received directly from Market Jar Media Inc., which was directly engaged by the issuers set forth above.
Neither Market Jar nor its owners, members, officers, directors, partners, consultants, nor anyone involved in the publication of this website, is a registered investment advisor or broker-dealer or associated person with a registered investment advisor or broker-dealer and none of the foregoing make any recommendation that the purchase or sale of securities of any company or any cryptocurrency on the CryptoCurrencyNews.com website is suitable or advisable for any person or that an investment or transaction in such securities will be profitable. Therefore, information on this website is not intended to be, and shall not substitute, an offer to sell nor the solicitation of any offer to buy any security.
The opinions and analysis included in this website related to the profiled companies represent the personal and subjective views of the author of the articles, and are subject to change at any time without notice. The information provided in the articles on the website and the content has been obtained from sources which the authors believe to be reliable. However, the authors have not independently verified or otherwise investigated all such information. None of the authors, Market Jar, Market Jar Media Inc., or any of their respective affiliates, guarantee the accuracy or completeness of any such information. The opinion, analysis, articles and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer’s filings made with the Securities and Exchange Commission, the Canadian security regulatory authorities, or any other regulatory authority before making any investment decisions and should understand the risks associated with an investment in the profiled issuer’s securities, including, but not limited to, the complete loss of your investment.
Information obtained from public filings and other sources are deemed reliable; however, Market Jar take no responsibility for verifying the accuracy of such information and makes no representation that such information is complete and correct. Market Jar makes no representation or guarantee that any forward-looking statements will prove to be accurate. Persons using the CryptoCurrencyNews.com website are encouraged to consult with independent financial advisors with respect to an investment in any company profiled in the website. Investors should therefore verify independently information provided in the CryptoCurrencyNews.com website by completing their due diligence on any company in which their clients are contemplating an investment. Such information to be reviewed could include the company’s annual reports, regulatory filings, and press releases on the sec.gov or www.sedar.com website or directly from the issuer.
The content published on this website is intended for and only to be used for reference purposes and is neither an offer nor a solicitation to purchase or sell any security or instrument or to participate in any particular trading strategy. No such information provided through the CryptoCurrencyNews.com website constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific person. Users of this website agree that they are not using any content of this website in connection with an investment decision.
THERE CAN BE NO ASSURANCE THAT CONTENTS PUBLISHED ON CRYPTOCURRENCYNEWS.COM IS ACCURATE OR WITHOUT ERROR. ANY PERSON WHO MAKES USE OF SUCH CONTENT AFFIRMATIVELY ASSUMES ALL RISKS FROM USING THE CONTENT. CryptoCurrencyNews.com does not guarantee it reviews, and is not responsible for confirming the accuracy of information submitted for inclusion on this site. INVESTORS ARE STRONGLY ADVISED TO CONFIRM THE ACCURACY OF ANY INFORMATION OBTAINED FROM THIS SITE PRIOR TO MAKING ANY INVESTMENT DECISION.
OTC Risk Warnings
Because many securities traded Over-The-Counter (OTC) are relatively illiquid, or “thinly traded,” which tends to increase volatility in market prices, an investment in an OTC security involves a high degree of risk. These speculative and illiquid securities are often difficult for investors to buy or sell without significantly affecting the quoted price. It should be noted that the liquidation of a position in an OTC security may not even be possible within a reasonable period of time.
Dependable information regarding issuers of OTC securities, their prospects, or the risks associated with the business of any particular issuer or an investment in the issuer’s securities may not be available. For this reason, it may be difficult to properly value an investment in an OTC security or accurately determine the risks involved with investing in such a security. For more information about investing in microcap securities, please read the content on the SEC’s website, including the SEC’s investor publication titled “Microcap Stock: A Guide for Investors” available at https://www.sec.gov/investor/pubs/microcapstock.htm.
Issuers of OTC securities quoted on the OTC Link system are not required to provide any kind of information to investors. While many issuers register OTC securities with the Securities and Exchange Commission (SEC) and regularly provide reports to investors in connection with such registration, they are not required to continue such registration or regularly provide such reports because their securities are quoted on OTC Link. Securities may continue to be quoted on the OTC Link system if issuers are delinquent in their reporting obligation to the SEC or other federal or state regulatory agencies. Quotation of a security on the OTC Link system does not in itself create any ongoing filing or reporting obligations with the SEC for any issuer. In fact, issuers may not even be aware that their securities are quoted on the OTC Link system.
The information on this website has been prepared for information purposes only and does not constitute an offer to sell or trade, a solicitation to buy, or recommendation for any security, cryptocurrency, ICO or related product, nor does it constitute an offer to provide investment advice or other related services by Market Jar Media Inc., or any of its principals, agents, owners, members or anyone else affiliated with the company, either expressly or indirectly. In preparing the information contained on this website, no individual financial or investment needs of the recipient have been taken into account nor is any financial or investment advice being offered. Any views expressed in on this website were prepared based upon the information available at the time such views were written. Changed or additional information could cause such views to change and Market Jar is under no obligation to provide notice of such information or update such views.