The United States is having trouble losing its world power dominance to China and is clinging to old principles. The proxy war with Russia over Ukraine is also seen by many as a geopolitical measure to weaken the EU and bind it more closely to itself. The dollar has lost a great deal of importance in recent years, which also costs influence. While the Americans struggle with cyberfinance and crypto, the EU has made Bitcoin & Co part of the European financial system with MiCA.
The US dollar share of global currency reserves has decreased from about two-thirds in 2003 to 55% in 2021 and 47%in 2022, said Joana Freire and Stephen Jen, strategists with the Eurizon SLJ Asset Management. The dollar is losing its market share as a reserve currency much faster than is commonly believed. According to the latest data from the International Monetary Fund (IMF) latest data, the dollar’s share of central bank reserves stands at 58.4%, down from roughly 70% in the late 1990s.
As dollar dominance weakens, Americans are currently a divided nation. While regulators and law enforcement are massively cracking down on crypto companies and their operators, U.S. lawmakers were critical of SEC Chair Gary Gensler‘s crypto regulation in last week’s hearing. The Americans currently appear geopolitically battered.
In contrast, the EU adopted MiCA last week, making crypto part of the EU’s existing monetary system and installing ESMA as the EU-wide regulator for the first time.
MiCA forms part of the EU’s broader digital financial package, which includes the Digital Operational Resilience Act and the Pilot Regime on Distributed Ledger Technology. Under the supervision of the EU regulator ESMA, the regulatory framework will apply directly across the EU without any need for national implementation laws ensuring a single crypto across the union.
