I can see, potentially, the dollar losing its reserve status in practice, if not in an official way. We may still price things, Internationally, in dollars due to the “stability” of the currency compared to other national currencies. However, the transaction could be done in crypto, or stablecoin at the very least.
What this does is that it keeps the dollar relevant. However, it removes the currency controls in place by bypassing banking regulations and controls. So, we would be doing business in dollars, yet using dollar substitutes for the actual transactions. In this regard, dollar stablecoin might be more widely accepted for the lack of inefficiency that actual dollars have. This would be a perfect replacement for Eurodollars and other instances of foreign contracts denominated in dollars. DAI, for example, does not require actual dollars to issue new tokens. USDT claims to use a combination of dollars and other assets. In other words, a reserve currency without actually being used to transact. It only serves as a peg. This means that smart contracts are expanding and contracting the money supply, backed by assets, rather than the Fed, backed by “we said so”.
In fact, now that I think of it, there is somewhat of a gold standard when you use stablecoin and tokenized gold. They are easily convertible from one to the other. In addition, with services such as Celsius, you can borrow against your gold tokens. Can there really be a run on the bank for gold if it dynamically prices itself according to demand?
You got me thinking.
Presuming gold is going to be a valued commodity in the future which I highly doubt. That goes against the technological advancement we have plus as we enter the abundance of the virtual world, something in the physical is going to have less value. I could see what you state as being done with Bitcoin though since that was designed for the world we are entering.
That is going to take a while to get there though. So what happens in the meantime will be very interesting.
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