Post
Topic
Board Economics
Re: Maybe Not Possible For Governments To Get Off Fiat??
by
Gyfts
on 23/04/2023, 08:04:44 UTC
As others have already mentioned, there isn't necessarily a need for countries to drop fiat from their reserves completely. They're generally only interested in having stable assets, so the highly inflating currencies are the first to be dropped in place for other more stable assets. USD isn't attractive with a 40 year inflation high, so countries that had USD in reserves didn't completely rid the currency, only reduced its holdings.


For example I am in Canada. If our country here stopped the USA dollar altogether for the trade transaction between USA and Canada there be serious consequences, even if my country Canada the government dropped the Canadian dollar or any fiat system in the country and moved to a new system, like BTC or some non fiat money system on the national system. There would be very serious sequences coming back from other governments in other countries.
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This isn't necessarily the case because most commerce transactions are between private parties in the U.S. and Canada if I'm not mistaken. The government can reduce USD from their reserves and it wouldn't be too consequential short term.