Nicolas Maduro, Venezuela’s controversial president, says the world’s move from the US dollar to a new world reserve currency is inevitable. In his most recent weekly update, Maduro shares that the US sanctions are the main reason for countries to start the search for an alternative.
African countries set the tone in this, according to Maduro. For example, look at Zimbabwe, which recently launched its gold-backed digital currency.
Alternatives emerge
That there is a need for an alternative in Venezuela is evident from the performance of its own currency against the US dollar. In the past year, it has already lost more than 80 percent of its value against the world reserve currency.
Perhaps it is an opportunity for Venezuela to join the BRICS alliance, which is also said to be working on an alternative. The only downside is that the West probably has no confidence in that bloc of countries, which will make it difficult to trade.
Polarization to that extent would not be a good thing for the world. In any case, that would have little effect on trade. Tensions are already running high and an alternative to the US dollar would only make things worse.
More balanced
Maduro himself says in his weekly update on YouTube that an alternative to the US dollar may provide more balance in the world. That would be a good thing for many countries and many people in the world. After all, the bulk of the world’s wealth is currently in the West.
In that respect, it would not be wrong at all if there was a better distribution. If an alternative to the US dollar can do that, then that would be a good thing.
Bitcoin probably cannot play a role in this yet. The difficult thing for countries like Venezuela is that you cannot print Bitcoin, which makes it difficult to work with the digital currency for countries that are always short.
Volatility also plays a role, of course. You can’t expect people in those kinds of countries to throw everything on Bitcoin. The risk is simply too great for that.