3 ms·

what's going to replace it?

api 1y ago
I doubt it will be a single currency. Something I think a lot of people miss in this discussion is that with computers and electronic markets dealing with currency conversions is fairly easy. In the past doing everything in USD vastly simplified everything, but today I think countries just trading with whatever currency works for a given market or transaction probably makes the most sense. There is no other world currency that looks both large and stable enough to replace USD. Chinese Yuan/Renminbi is probably the closest but it's probably viewed by many as too easily manipulated. It's a pure fiat currency run by a single party state with little separation of powers.
- gtirloni 1y ago
  A global currency has to have liquidity and availability and the Renminbi has none of those things. China doesn't seem willing to turn their country into a major importer (thus making the RMB more global) so I doubt it will replace the USD either. Probably all three USD/EUR/RMB will be around without a major takeover by a new entrant.
  - MaxPock 1y ago
    China is a major importer.Isnt 3 trillion dollars a year in imports "major" to you ?
    - selectodude 1y ago
      China pays for their imports using dollars.
    - gtirloni 1y ago
      It's a much much big exporter.
- pphysch 1y ago
  My view is that the primary purpose of money is to enable balanced exchange of useful goods and services, and with that premise, "money" could be replaced by large information systems. In fact, that transition is long underway. Who uses cash anymore?
- triceratops 1y ago
  Computers and electronic markets don't solve currency conversion so easily because it's not just about doing math. If say a Thai company wants to buy cocoa beans from Nigeria, the Nigerian exporter doesn't have any immediate use for Thai baht if they aren't planning to buy something from Thailand. If exports and imports between two countries aren't relatively balanced there won't be a liquid market between their currencies.
  - api 1y ago
    What if countries form networks? If Nigeria has no use for Thai Baht they swap it with another country for US dollars, Euros, Rinminbi, whatever. It could all be done automatically in near real time.
    - triceratops 1y ago
      So there's still an intermediate currency needed. Which is how it works right now. And the preferred intermediate currency when trading currencies with non-liquid markets is USD.[1] 1. https://www.lynalden.com/may-2025-newsletter/ https://www.lynalden.com/may-2025-newsletter/
      - api 1y ago
        It might be how it’s done now but I don’t see why that’s how it has to be done. It’s just math and database transactions. Not having a fixed intermediate does make things more complicated since it requires many-party transactions between floating currencies. But lots of math nerds with backgrounds in physics go into finance. I’m sure they can figure it out. You could also create derivative instruments based on baskets of currencies and use those as intermediates.
mig1 1y ago
It literally says in the article that nothing is going to fully replace it. And the same way that it didn’t happen overnight for it to become the force that it’s today in the global economy, it won’t disappear overnight either.
- slt2021 1y ago
  America decided to politicize and weaponize the USD and so the rest of the world decided to reduce usage of USD in international trade. They can use currencies of their trade partners to trade, so that: 1. Currency flows are invisible to the Fed 2. US sanctions cannot ban mutual trade in other FX these two are the major ones, so if Brazil wants to trade with China, they don't need to use USD, they can hold each other's FX as some reserve and use it for trade
throwaway920102 1y ago
pretty much all economists and commentators state that the replacement will be a basket of currencies not a single currency, where each countries' basket will be weighted by the typical trade volume they have with other countries (more trade with Country X, then hold more of Country X's currency) plus some factor for stability/volatility/currency risk etc.
- decimalenough 1y ago
  This, incidentally, is exactly how the value of the Singapore dollar is managed.
slt2021 1y ago
national currencies of other countries, which are backed by gold and their national reserves.
paulpauper 1y ago
Nothing. Even the price of bitcoin is measured in dollars.
- pedalpete 1y ago
  There is a whole subset of the crypto community that says 1 bitcoin = 1 bitcoin. What does it take to go from bitcoin being measured in US dollars to US dollars being measured in bitcoin.
  - lxgr 1y ago
    > What does it take to go from bitcoin being measured in US dollars to US dollars being measured in bitcoin. Just for Bitcoin to no longer be deflationary. Right now it's much too good a store of value to become an effective medium of exchange.
- averageRoyalty 1y ago
  By whom? If I wish to look up bitcoin exchange pricing, I look it up based on AUD. I wouldn't measure bitcoin in USD, that would hold no value to me or billions of others globally.
  - pram 1y ago
    This is pretty rich considering the volume of Tether, USDC, etc. For whom? I'd say: the exchanges themselves, casinos, a litany of other things
zmmmmm 1y ago
My guess is that initially it will get eaten away by parties that currently trade in US dollar for convenience shifting to trading directly in their native currencies. It's a pure cost / risk equation for them that they have to manage this third variable in their dealings and if that outweighs the benefits of using a common currency they will make an agreement to trade directly. This will happen slowly over a long time and eventually a new default currency will emerge as a result of these decisions.

api 1y ago

I doubt it will be a single currency. Something I think a lot of people miss in this discussion is that with computers and electronic markets dealing with currency conversions is fairly easy. In the past doing everything in USD vastly simplified everything, but today I think countries just trading with whatever currency works for a given market or transaction probably makes the most sense. There is no other world currency that looks both large and stable enough to replace USD. Chinese Yuan/Renminbi is probably the closest but it's probably viewed by many as too easily manipulated. It's a pure fiat currency run by a single party state with little separation of powers.

gtirloni 1y ago
A global currency has to have liquidity and availability and the Renminbi has none of those things. China doesn't seem willing to turn their country into a major importer (thus making the RMB more global) so I doubt it will replace the USD either. Probably all three USD/EUR/RMB will be around without a major takeover by a new entrant.
- MaxPock 1y ago
  China is a major importer.Isnt 3 trillion dollars a year in imports "major" to you ?
  - selectodude 1y ago
    China pays for their imports using dollars.
  - gtirloni 1y ago
    It's a much much big exporter.
pphysch 1y ago
My view is that the primary purpose of money is to enable balanced exchange of useful goods and services, and with that premise, "money" could be replaced by large information systems. In fact, that transition is long underway. Who uses cash anymore?
triceratops 1y ago
Computers and electronic markets don't solve currency conversion so easily because it's not just about doing math. If say a Thai company wants to buy cocoa beans from Nigeria, the Nigerian exporter doesn't have any immediate use for Thai baht if they aren't planning to buy something from Thailand. If exports and imports between two countries aren't relatively balanced there won't be a liquid market between their currencies.
- api 1y ago
  What if countries form networks? If Nigeria has no use for Thai Baht they swap it with another country for US dollars, Euros, Rinminbi, whatever. It could all be done automatically in near real time.
  - triceratops 1y ago
    So there's still an intermediate currency needed. Which is how it works right now. And the preferred intermediate currency when trading currencies with non-liquid markets is USD.[1] 1. https://www.lynalden.com/may-2025-newsletter/ https://www.lynalden.com/may-2025-newsletter/
    - api 1y ago
      It might be how it’s done now but I don’t see why that’s how it has to be done. It’s just math and database transactions. Not having a fixed intermediate does make things more complicated since it requires many-party transactions between floating currencies. But lots of math nerds with backgrounds in physics go into finance. I’m sure they can figure it out. You could also create derivative instruments based on baskets of currencies and use those as intermediates.

mig1 1y ago

It literally says in the article that nothing is going to fully replace it. And the same way that it didn’t happen overnight for it to become the force that it’s today in the global economy, it won’t disappear overnight either.

slt2021 1y ago
America decided to politicize and weaponize the USD and so the rest of the world decided to reduce usage of USD in international trade. They can use currencies of their trade partners to trade, so that: 1. Currency flows are invisible to the Fed 2. US sanctions cannot ban mutual trade in other FX these two are the major ones, so if Brazil wants to trade with China, they don't need to use USD, they can hold each other's FX as some reserve and use it for trade

throwaway920102 1y ago

pretty much all economists and commentators state that the replacement will be a basket of currencies not a single currency, where each countries' basket will be weighted by the typical trade volume they have with other countries (more trade with Country X, then hold more of Country X's currency) plus some factor for stability/volatility/currency risk etc.

decimalenough 1y ago
This, incidentally, is exactly how the value of the Singapore dollar is managed.

slt2021 1y ago

national currencies of other countries, which are backed by gold and their national reserves.

paulpauper 1y ago

Nothing. Even the price of bitcoin is measured in dollars.

pedalpete 1y ago
There is a whole subset of the crypto community that says 1 bitcoin = 1 bitcoin. What does it take to go from bitcoin being measured in US dollars to US dollars being measured in bitcoin.
- lxgr 1y ago
  > What does it take to go from bitcoin being measured in US dollars to US dollars being measured in bitcoin. Just for Bitcoin to no longer be deflationary. Right now it's much too good a store of value to become an effective medium of exchange.
averageRoyalty 1y ago
By whom? If I wish to look up bitcoin exchange pricing, I look it up based on AUD. I wouldn't measure bitcoin in USD, that would hold no value to me or billions of others globally.
- pram 1y ago
  This is pretty rich considering the volume of Tether, USDC, etc. For whom? I'd say: the exchanges themselves, casinos, a litany of other things

zmmmmm 1y ago

My guess is that initially it will get eaten away by parties that currently trade in US dollar for convenience shifting to trading directly in their native currencies. It's a pure cost / risk equation for them that they have to manage this third variable in their dealings and if that outweighs the benefits of using a common currency they will make an agreement to trade directly. This will happen slowly over a long time and eventually a new default currency will emerge as a result of these decisions.