Morgan Stanley Predicts Future of the U.S. Dollar

Leading global investment bank Morgan Stanley published a new report predicting the future of the U.S. dollar. The prediction comes at a time when BRICS is looking to dethrone the U.S. dollar as the world’s reserve currency. Morgan Stanley weighed in on the threat from BRICS, CBDCs, Bitcoin, and stablecoins that are aiming to uproot the U.S. dollar’s hegemony. A handful of contenders, apart from BRICS, are in the race to cut ties with the U.S. dollar and make their currency supreme, said Morgan Stanley.

Also Read: Saudi Arabia To Decline BRICS Membership?

Read here to know how many sectors in the U.S. will be affected if BRICS stops using the dollar for trade. The move will hamper the U.S. dollar’s prospects leading to hyperinflation and job cuts in the homeland.

BRICS: Morgan Stanley Predicts U.S. Dollar’s Future Amid Global Scrutiny

The report from Morgan Stanley stressed that the U.S. dollar “is being increasingly scrutinized,” across the globe. From the BRICS bloc to ASEAN countries, developing nations are looking at alternatives to the U.S. dollar financial system.

Also Read: BRICS: U.S. Dollar Ranks Last in the Top 10 Currency List

“A clear shift towards reducing dollar-dependency is evident, simultaneously fueling interest in digital currencies such as Bitcoin, stablecoins, and CBDCs,” wrote Morgan Stanley’s analyst Andrew Peel, the bank’s Executive Director and Head of Digital Asset Markets in the report titled “Digital (De)Dollarization?”

Morgan Stanley explained that both China and the European Union are advancing their currencies as replacements for the U.S. dollar.

“China is advancing the Yuan in international trade. The European Union is actively working to bolster the Euro’s role in international trade, aiming to provide a viable alternative to the dollar,” he wrote.

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“Notably, the recent growth in interest of digital assets such as bitcoin, growth of stablecoin volumes, and the promise of central bank digital currencies (CBDCs), have the potential to significantly alter the currency landscape. The U.S. dollar’s dominance as the cornerstone of the international financial system is now being reconsidered in the face of evolving geopolitical shifts and the growing U.S. twin deficits,” he summed it up.

In conclusion, Morgan Stanley predicts the U.S. dollar will have to fight BRICS, CBDCs, Bitcoin, and stablecoins to stay relevant. This comes on the heels of BRICS spearheading the de-dollarization movement against the U.S. dollar.

Also Read: 3 Countries Agree To Launch BRICS Currency To Challenge US Dollar