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Lucrezia Reichlin. Credit: CC/Niccolo Caranti

Whereas some criminal speculators are urging caution about the crypto craze, others, such as London Business School Professor and former ECB Director of Research Lucrezia Reichlin hail it as an appealing solution to a waning dollar.

Writing for Project Syndicate on Jan. 31, Reichlin attributes the accelerating exit from the dollar by many nations of the world to a reaction against Trump’s aggressive tariff and trade policies, one which is jeopardizing the dollar as the world reserve currency. In a thinly veiled swipe at the BRICS nations, Reichlin claims that “with China and other emerging economies commanding a growing share of global GDP and trade, it is difficult to imagine that efforts to develop payment systems independent of the dollar won’t accelerate if Trump continues to weaponize the greenback.”

Clinging tightly to the bankrupt axioms of the current monetary system, Reichlin suggests that embracing cryptocurrencies may supply the hit that the dollar needs to stay afloat. “Stablecoins, backed by U.S. dollars, share many of the characteristics and advantages that once drove the growth of the eurodollar market.” Namely, freedom from regulation, and anonymity. “The combination of stability and secrecy has already made stablecoins appealing to libertarians and criminals.” And therefore, why not scale it up?

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