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03 Jan 2023  (499 Views) 
International economy

Alternative to US dollar
I am still studying which of the following is a better alternative to the US dollar:

a) Global currency
b) International RMB (or e-CNY) which is different from domestic RMB.

The global currency will need to be supervised by a few participating countries, e.g. BRICS.

The e-CNY will be managed by China, but it has to be done fairly and transparently to gain the confidence of other countries. It will be different from the domestic RMB because China wants to keep interest rate low to protect the China economy.

Each option has its advantages and disadvantages. There is no perfect solution.

A global currency will get the support of a few sponsoring countries and will be better trusted by other countries. But it may be difficult to get a few countries to agree on future policy and direction. 

The e-CNY can be managed easily, as it depends only on China. While some countries do not like to rely on China, they will probably find China to be more trustworthy than America. 

I have not decided which option is likely to work better. I shall think more about the choice.

I am confident that most countries want an alternative to the US dollar, to get away from the abuse of the US over its currency. Furthermore, the US dollar is likely to collapse due to the huge national debt.

Tan Kin Lian

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