Great to be on “Geopolitcs in Conflict Show” with Dr. David Oualaalou! This is my second time on the show and I love the dynamics!
In this episode I speak to the issue of sanctions and how CBDCs will be “sanction proof.” This is a big issue with CBDCs in Russia, China and others. Countries under US sanctions may someday switch to using digital currency.
Another topic that came up is the Chinese yuan or Digital yuan as a reserve currency. While the yuan is likely to be more widely used in the future and the digital version (CBDC) will help, don’t look for the yuan to “topple” or “dethrone” the US dollar. Instead, look for a gradual change with the Chinese yuan making a small but consistent impact on dollar use.
Remember that the yuan doesn’t have to “topple” the dollar to be a disruptor! I write in my book “Cashless” how the digital yuan will play a big part in this process.
Disclaimer 1. I am disgusted with the war in Ukraine and am no supporter.
Disclaimer 2. De-dollarization is a slow process. It would be easy to say “nothing is happening.”
Sanction evasion isn’t new! Iran has been evading them since 2012. Russia’s economy is hard to cut off.
9:30 Sanctions who pays?
Ordinary citizens pay the price for sanctions, and they are causing de-dollarization.
11:30 Yuan as a reserve currency?
No not yet! The yuan isn’t ready yet. YES, the yuan can become a “regional reserve currency” within ASEAN nations and BRI countries.
Gold? A few years ago I would have told you that you were nuts. I DON’T SEE A GOLD BACKED YUAN, but Russia and Iran are building a gold-backed stablecoin.
24:00 💣TRUTH BOMB:
That global south nations are looking for USD alternatives is a problem! They will eventually find one!
We are changing from the post-WW2 US-centric world to a multipolar one.
28:55 Why do you write about geopolitics?
Fintech is now a pawn in the great geopolitical game! You can’t talk about fintech without touching on geopolitics.
30:30 Exec order 14067?
The exec order doesn’t authorize a CBDC, just research! People say this to create fear or sell gold and crypto.
37:00 BIS Project Icebreaker?
The BIS is building CBDC transfer systems, that are critical infrastructure. BRICS nations will all have CBDCs and use these transfer systems.
42:40 CBDC and sanctions?
Yes absolutely! CBDC is sanction resistant.
45:03 💣TRUTH BOMB:
Next time you hear the Fed say “there is no first-mover advantage to developing a CBDC,” don’t believe them!
46:30 Africa and CBDC:
Africa is looking at CBDCs for financial inclusion and lower cost of international cash transfers.
49:30 Brazil and Argentina’s “Sur:”
Brazil and Argentina are not pariah nations and are looking to de-dollarize! They want a cheaper way to trade.
53:30 Will other South American countries join?
If the Sur is any good, others like Mexico will use it!
56:00 Could the Euro dissolve?
No way, no how.
58:30 The digital euro?
The digital euro is an insurance policy for the EU. Do not expect the EU to move in lockstep with the US forever.