28. September 2023

Global De-Dollarization: How Bitcoin Could Play a Role

• The article written by Arthur Hayes, co-founder of BitMEX, explores the global dominance of the US dollar and how it could be affected by de-dollarization.
• Hayes discusses the impact of open capital accounts, free trade and US government policies on the demand for dollars worldwide.
• He suggests that as the dollar declines, more countries may turn to Bitcoin as a savings vehicle.

Global De-Dollarization and the Role of Bitcoin

BitMEX’s co-founder Arthur Hayes recently published an essay exploring the economics and role of the dollar worldwide, examining how its shrinking role could affect global crypto adoption.

US Dollar Dominance and Decline

Hayes explained that the dollar’s dominance worldwide is propped up by two factors: open capital accounts which allow Asian countries to purchase American assets with USD; and free trade which allows Americans to purchase cheap Asian products.

However, when additional demand for USD occurs from outside sources, it puts inflationary pressure on the domestic economy – something which only America can solve since they are responsible for keeping the global economy intact.

„Trillions of dollars of Asia’s wealth also depend on the good graces of American politicians,“ wrote Hayes. „As Russia recently found out, rule of law and property rights are not ironclad.“

The Possibility Of De-Dollarization

Hayes suggests that if other countries wish to escape this system due to their mistrust in American policy makers, then they may seek alternative safe havens such as Bitcoin or gold.

Bitcoin As A Savings Vehicle

Due to its decentralized nature and lack of direct ties to a central bank or government entity, Hayes believes that Bitcoin has potential as a viable asset class for those looking to preserve their wealth in times where de-dollarization is becoming increasingly likely.