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The Rise of CBDCs Could Lead to the End of the Dollar-Based International Monetary System

Brazil's adoption of central bank digital currencies (CBDCs) may lead to de-dollarization and a shift away from the dollar-based international monetary system in the next decade, potentially creating a multi-currency world. Economist Zoltan Pozsar suggests that CBDCs could reduce global demand for dollars and displace correspondent banks. The US should leverage the soft power aspects of the dollar's dominance, reserve official digital dollars for cross-border settlements, and avoid following China's centralized digital currency model, instead allowing decentralized models with crypto technology for domestic use.

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