Page 58 - COVID-19: The Great Reset

administration to weaponize the US dollar for geopolitical
purposes (like punishing countries and companies that trade with

Iran or North Korea) will inevitably incentivize dollar holders to
look for alternatives.

Are there any viable alternatives? The US remains a
formidable global financial hegemon (the role of the dollar in
international financial transactions is far greater, albeit less visible,

than in international trade), but it is also true than many countries
would like to challenge the dollar’s global dominance. In the short
term, there are no alternatives. The Chinese renminbi (RMB)

could be an option, but not until strict capital controls are
eliminated and the RMB turns into a market-determined currency,
which is unlikely to happen in the foreseeable future. The same
goes for the euro; it could be an option, but not until doubts about
a possible implosion of the eurozone dissipate for good, which

again is an unlikely prospect in the next few years. As for a global
virtual currency, there is none in sight yet, but there are attempts
to launch national digital currencies that may eventually dethrone

the US dollar supremacy. The most significant one took place in
China at the end of April 2020 with a test of a national digital
currency in four large cities. [52] The country is years ahead of the
rest of the world in developing a digital currency combined with

powerful electronic payment platforms; this experiment clearly
shows that there are monetary systems that are trying to become
independent from US intermediaries while moving towards greater
digitization.

Ultimately, the possible end of the US dollar’s primacy will
depend on what happens in the US. As Henry Paulson, a former
US Treasury Secretary, says: “US dollar prominence begins at
home (…). The United States must maintain an economy that
inspires global credibility and confidence. Failure to do so will,

over time, put the US dollar’s position in peril”. [53] To a large
extent, US global credibility also depends on geopolitics and the
appeal of its social model. The “exorbitant privilege” is intricately

intertwined with global power, the perception of the US as a
reliable partner and its role in the working of multilateral
institutions. “If that role were seen as less sure and that security

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