De-Dollarization Explained by Top Currency Economist Stephen Jen



Happy Saturday, readers. I’m Phil Rosen. Let’s talk about the dollar’s role on the world stage — and see what one of the leading currency economists has to say about it.

As ever, if you have any suggestions for who I should interview next, let me know on Twitter @philrosenn, or email me

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Stephen Jen Dollar Smile theory Eurizon

Stephen Jen, CEO of Eurizon SLJ

Eurizon SLJ

Stephen Jen is a leading economist, the cofounder and CEO of Eurizon SLJ, and inventor of the “dollar smile” theory. This conversation has been lightly edited for length and clarity. 

Phil Rosen: You pointed out recently that the dollar saw a steep erosion in 2022 as a global reserve currency. Can you explain what fueled this, and whether the trend will continue?

Our best guess as to the main cause of this is the US’ use of exceptional sanctions, including the freezing or confiscation of half of Russia’s $620 billion in foreign reserves, as well as outright confiscation of assets owned by Russian oligarchs.

Our best guess is that this trend will likely continue, but probably not to a point where a non-dollar currency commands a bigger market share than the dollar.

More likely, we will evolve from a unipolar reserve currency world to a multi-polar world

There’s a lot of chatter about China’s yuan being a possible rival to the greenback. What has to happen for this to come to fruition?

China’s financial sector has to improve in quality. For the RMB to challenge the USD, it will take many years, I’m afraid.  

The main reason is that foreigners are still uncomfortable investing in Chinese equities and bonds, and the US is trying hard to make this as difficult as possible.  

Without foreign demand for Chinese assets, Chinese savers and households cannot be allowed to invest overseas, and thus the capital controls would need to remain in place.

Here’s what he said on a potential “tripolar” reserve currency setup if the dollar loses dominance.

What do you think of Jen’s outlook on the balance of power for currencies? Let me know.

And here are the top stories from markets this week: 

lauren simmons nyse

Lauren Simmons, a trader at the New York Stock Exchange.

Courtesy of Lauren Simmons

1. Bullish signals are now flashing that suggest stocks are heading for a “summer rip,” according to Bank of America. Equities could rally in the coming months thanks to key indicators that suggest the market will dip in May before rallying through the summer. That could lead to the S&P 500 adding 5%

2. From cooling inflation to a looming recession, here’s what the CEOs of the five largest US banks expect for the economy through 2023. JPMorgan’s Jamie Dimon warned of “storm clouds” ahead, while Morgan Stanley’s James Gorman sounded off on the bank crisis. Read more.

3. Investing in artificial intelligence is all the rage these days. Wall Street’s been paying extra attention to the budding space this year. These four tech fund managers told us where to park your cash without getting sucked into the hype.

4. Standard Chartered said bitcoin could soar 268% as crypto winter comes to an end. That’s due to last month’s bank turmoil, as well as the halving process that the crypto is about to see: “We think the pathway to the USD 100,000 level is becoming clearer.”

5. The housing market is close to bottoming, Morgan Stanley said, adding that could allow for an economic soft-landing. Ultimately, the firm’s strategists don’t expect a big rebound in prices.

6. Russian weapon sales to India are being held up by a disagreement over which currency to use. Deliveries have paused due to the standoff, and more than $2 billion in payments have been frozen for about a year, a Bloomberg report found. India won’t pay Russia in dollars over concerns it could face secondary sanctions.

7. Stock market forecasts are getting grimmer. Veteran commentators and strategists including Marko Kolanovic and Jeremy Siegel have warned that equities are entering a danger zone. Here’s what some of the most high-profile forecasters are saying.

8. Bed Bath & Beyond filed for bankruptcy 8 months after an activist investor and a college student made a combined $180 million on the meme stock. Since August, shares have plummeted from $30 to mere cents. Full details here.

9. Meet a married couple that has built a $19 million, 47-unit property portfolio. The pair shared the approach they learned after buying their first property by accident, and why they chase the “bread and butter” of multi-family properties.

10. This fund manager has won out over 90% of his peers in the last year. The small-cap expert shared which stocks he’s betting on now — and how to chop down the downside risk in a particularly volatile corner of the market.

Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email

Edited by Max Adams (@maxradams) in New York.


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