Dollar Dominance, Dollar Dependence

Source: American Institute for Economic Research
by Joakim Book

“If you make your currency less usable — say, by running aggravatingly high inflation, by closing services outside of banking hours, by burdening users with insultingly silly paperwork and know-your-customer requirements, by freezing accounts over minor infractions, or by confiscating your geopolitical enemy’s assets — fewer people will end up using it. No matter its other virtues, by aggressively weaponizing the global currency you issue, you make it worse. Since money wants to be one and since once established a given money is kept in place by strong network effects, when fewer people hold and use your money, those network effects unravel exponentially.” (06/03/24)