For the second consecutive quarter, says criptonoticias, central banks have a lower percentage of dollars in their possession as a store of value. The holding proportion of the United States currency went from 61.2% in the second quarter of 2020 to 60.4% in the third, according to data from the International Monetary Fund (IMF).
On the other hand, if the raw numbers are taken into account, the difference was positive. Dollar reserves went from USD 6.90 trillion in the second quarter of 2020 to USD 6.93 trillion in the third. In the same period, world reserves in all currencies increased from USD 12.01 trillion to USD 12.25 trillion.
Main Reserve currency
IMF data shows that the dollar, despite the percentage decline in its use, remains the world’s main reserve currency. It is followed by the euro (20.53%), the yen (5.92%) and the British pound (4.50%).
Reserves are assets that central banks hold in different currencies and use them to back their liabilities. They function as economic indicators since they show the resources available to a country to carry out purchasing operations at the international level. In this type of transaction, only relatively strong currencies are accepted as a means of payment.
It Will Lose Status
“It is true that the dollar will one day lose its status, as was the case with all previous global reserve currencies,” David Rosenberg, who is an economist and strategist at Rosenberg Research, recently said. However, this analyst is convinced that there is little chance of this happening “during our lifetime” because “the United States still has the most powerful military on the planet.”
Rosenberg’s view on the future of the dollar as the world’s store of value currency is shared by other analysts. According to the Reuters news agency, among the reasons that could cause the depreciation of the dollar by central banks are “the waning geopolitical power of the United States, the enormous burden of debt and the emergence of alternative currencies.”
Previous news and reports mention that before the fall of the dollar and fiat currencies, one of the great alternatives would be Bitcoin as a new value reserve asset.
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