Forex in this article
• The development of a tokenized US dollar to save the American reserve currency
• The digital currency is backed by fundamental assets
• Roubini further reiterates his criticism of cryptocurrencies
The one as Dr. Doom, a well-known economics professor, recently warned several times of stagflation and drew gloomy scenarios.
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Roubini sees US dollar role at risk
As a direct result of the Ukraine war, Roubini sees the role of the US dollar as a key instrument in enforcing global sanctions at risk, which will inevitably weaken the fiat currency. A diversification of the currency reserves of different countries is definitely a factor with a strong stagflationary effect. Weaponizing the US dollar weakens the US currency and adversely affects the international financial system. Therefore, it seems logical to look for a way to strengthen the US dollar. Roubini wants to partner with Atlas Capital CEO Reza Bundy to “launch a new instrument that is actually a more resilient dollar.” This commitment to developing a digital US currency is certainly not to be understood as Roubini’s turn to cryptocurrencies.
Tokenized US dollar on the way?
In an interview with Bloomberg, Nouriel Roubini talks about his role in developing a digital coin that could take the US dollar’s role in the global economy. The Atlas Capital team, co-founded by Roubini, is working on a tokenized US dollar. “We recognize that America’s reserve currency, the dollar, may be under threat and are working to create a new instrument that effectively represents a more resilient dollar,” Roubini told Bloomberg. Together with Web3 developer Mysten Labs, the Dubai-based company is in charge of the development of the United Sovereign Governance Gold Optimized Dollar (USG).
On Twitter, Roubini summarized the development of the USG in three steps.
USG will be first an index, then an ETF & last a security token backed by real/fin assets with AML/KYC features. Hedge against inflation, pol/geopol risks; & with ESG features.
Crypto Critic Nouriel Roubini Is Working on a Tokenized Dollar Replacement https://t.co/kk38notzkB
– Nouriel Roubini (@Nouriel) May 9, 2022
The USG should initially be created as a traditional index that offers total return swaps to large investors. In a second step, an exchange-traded fund, an ETF, will then be created. In a third and final step, a security token can then be developed that is backed by fundamental assets such as short-term US government bonds, gold and US real estate. This token should be launched this year, according to Roubini in an interview.
The development of a digitized US dollar is the end and not the starting point of the process and serves to hedge against inflation, geopolitical risks, taking ESG criteria into account. Roubini also reiterates his negative attitude towards Bitcoin & Co at various points because they have no fundamental value. In a tweet he recently commented “40% of Bitcoin investors are now underwater”.
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