Will the Global Currency Reset Happen in 2025 (Or Ever)?
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Contents
- What is a Global Currency Reset?
- The Case for a Global Currency Reset
- The Case Against It
- The Practical Problems with a Global Currency Reset
- Alternatives to a Full-Blown Global Currency Reset
- 1. Debt Restructuring and Managed Write-Downs
- 2. Gradual Currency Realignments
- 3. Expansion of Special Drawing Rights (SDRs)
- 4. Central Bank Digital Currencies (CBDCs) with Safeguards
- 5. Tougher Financial Regulations
- 6. Partial Gold-Backing for Currencies
- 7. Trading in Local Currencies, Not Dollars
- 8. Regulated Crypto Integration
- History of Past Global Currency Resets
- The Bretton Woods Agreement (1944)
- The Nixon Shock (1971) and PetroDollar System
- The Dollar's Continued Dominance
- How to Prepare for a Global Currency Reset
- Even if there is no global currency reset...
Clients sometimes ask us for our thoughts on the Global Currency Reset. If? When? How? And what do you need to do to protect against it?
The truth is, dominant currency regimes change from time to time. The world’s “reserve currency” changes. Even within the history of US dollar dominance, there have been big shifts.
But the larger question is: Is this something you should plan for or is it just another conspiracy rabbit hole that distracts you from more practical and more likely threats?
In this article, we’ll look at what a global currency reset is and what likely be needed for one to happen. We’ll address the signs that one might be coming. And we’ll look at (what we believe) are more likely alternatives that should be on your radar… and that you should give some serious consideration.
What is a Global Currency Reset?
To most people—including many of our clients—a Global Currency Reset (GCR) means a major event where the world’s financial system just changes overnight. That could mean:
- An end to the dominance of the current reserve currency. For the last 80 years, this has been the US dollar.
- Currency revaluation or devaluation. Manipulating currencies for the benefit of certain insiders.
- Monetary policy changes. Dramatic shifts in interest rates or inflation controls to influence the economy.
- Debt restructuring. “Resetting” the clock on unsustainable national debts through write downs. President Trump hinted at this when he recently announced that part of the US national debt might be “fraudulent.”
- A move to asset-backed currencies. Pegging money to gold or other commodities.
- A transition to Central Bank Digital Currencies (CBDCs). Replacing traditional cash with government-backed digital money—a move that would allow economic transactions to be tracked and controlled in a way unthinkable today.
Different people have different thoughts on exactly how this might play out but most share one thing in common—if and when it happens, it will be through coordinated efforts by central banks, governments, and financial institutions.
The Case for a Global Currency Reset
Supporters of a GCR argue that the global monetary system is unsustainable and in need of a major overhaul. They claim that:
Debt is unsustainable. Many countries (including and especially the US) have huge debts that continue to grow amazingly fast. Some people suggest a reset could restructure or forgive unsustainable national debts, preventing economic collapse.
Currency Manipulation and Instability. Some claim that major currencies like the US dollar have been so manipulated that they create market instability. A reset would let the market decide what the price of the dollar should be.
The Decline of the US Dollar as a Reserve Currency. The US dollar’s status as a reserve currency is slowly weakening by some measures, although it remains by far the world’s dominant currency. A reset could introduce a new reserve currency that would replace it.
The Rise of Central Bank Digital Currencies (CBDCs). Some see CBDCs as a stepping stone to a more stable global monetary system that could replace the current system of fiat currencies. It would also allow the powers that be to monitor economic transactions in a way that’s simply impossible at the moment. This would also allow the banks to stabilize the currency by manipulating economic activity up or down as needed.
The Case Against It
Most economists and financial experts argue that a GCR is either impractical, unnecessary, and/or highly unlikely. Their key counterpoints include:
The Global economy is just too complex. The modern financial system is made up of hundreds of countries that don’t always work well together. They all have their own interests. A coordinated reset would require unprecedented global cooperation. Hell is more likely to freeze over first.
The market already affects currency value. While the powers that be would like to think they control everything, the market has its own logic. Really dumb things done by politicians and bureaucrats have as much—or even more of—an effect on the value of a currency. We saw this first-hand in 2022, when an ill-timed budget announcement by the UK government led to a near-instant meltdown in the value of the British pound. A forced reset would cause economic chaos in the market. If history is any guide, that economic chaos would cause amazing political chaos…the sort of thing revolutions are made of.
Resistance from Financial Institutions. A lot of people in power have benefited greatly from the current system. To try and change it wholesale would cost them a lot of money. There’s no reason to think they wouldn’t fight tooth and nail to keep the gravy train going.
Gradual Evolution, Not Sudden Resets. Economic history shows that financial systems tend to change over time than through abrupt overhauls. Yes, there are times when things do change quickly, but not often… and certainly not in one massive, coordinated reset.
The Practical Problems with a Global Currency Reset
Let’s say that such a thing was actually tried. What would the logistics look like?
#1. How Would Governments and Regulators Agree?
A global currency reset is hard because countries have different goals and don’t generally like to give up control over their own money policies. Any reset will have winners and losers and it’s unlikely the losers are just going to go along with one plan without a fuss.
And even if somehow everyone did go along with a plan, it would take years, and possibly decades, to negotiate.
#2. How Would Currency Values Be Adjusted Without Causing Chaos?
Sudden currency shifts make trading and planning a nightmare. If investors panic, they’ll yank their money from banks and markets fast. Banking holidays? That would just make people more scared.
As money leaves the financial system, we could see the economy go into freefall. It could make the 1930s Depression look like a cakewalk in comparison.
#3. What Would Happen to Debt and Financial Contracts?
Think about all the bonds, loans, and mortgages based on today’s dollar. A reset could trigger defaults everywhere.
Banks have trillions locked into the current system. A quick change could drain their liquidity and send some under. Everything from pensions to your personal savings could suddenly be worth a lot less if money’s value changes overnight.
#4. How Would a Move to Digital Currencies Be Managed?
Let’s be honest – many people fear CBDCs would let governments track everything buy and turn your money on and off at will. Digital money systems would also be prime targets for hackers and fraudsters looking to disrupt everything.
Getting everyone to use a new digital system would require massive infrastructure changes and convincing a skeptical public.
#5. How Would Geopolitical Tensions Affect a Reset?
The dollar is still king, and dethroning it would cause economic shockwaves everywhere. China and Russia want alternatives, but nobody’s stepping up with something everyone trusts.
A reset would throw trade deals, tariffs, and investments into disarray, leaving markets guessing what’s next.
Alternatives to a Full-Blown Global Currency Reset
1. Debt Restructuring and Managed Write-Downs
How It Works: Big lenders like the International Monetary Fund (IMF) and World Bank negotiate better terms for struggling countries – forgiving some debt, lowering interest rates, or extending payment deadlines.
Pros:
- Stops financial meltdowns before they happen.
- Gives countries breathing room without economic collapse.
Cons:
- Lenders hate losing money and often resist forgiving debt.
- Some countries take advantage and rack up more debt later.
Likelihood: 8/10 – This already happens regularly, though big write-offs are rare.
2. Gradual Currency Realignments
How It Works: Central banks slowly shift currency values through controlled inflation, interest rate tweaks, and market interventions.
Pros:
- Markets have time to adjust without panic.
- Fixes currency imbalances without crashing economies.
Cons:
- Takes forever to see real results.
- Inflation can spiral out of control if mismanaged.
Likelihood: 7/10 – Central banks do this all the time, but coordination is tricky.
3. Expansion of Special Drawing Rights (SDRs)
How It Works: The IMF boosts the role of SDRs – a basket of major currencies – as a way to stabilize international trade.
Pros:
- Reduces over-reliance on the dollar.
- Creates a safety net for struggling economies.
Cons:
- Nobody outside banking circles uses SDRs.
- Would need massive reforms to replace the dollar.
Likelihood: 5/10 – They expand SDRs occasionally, but replacing the dollar? Not anytime soon.
4. Central Bank Digital Currencies (CBDCs) with Safeguards
How It Works: Governments roll out digital versions of their currencies while (supposedly) protecting privacy and avoiding too much central control.
Pros:
- Less cash dependency and more financial inclusion.
- Gives central banks more direct control over money.
Cons:
- Big Brother could track your every purchase.
- Hackers would love to target these systems.
Likelihood: 9/10 – Many central banks are already building these. For now, at least, an executive order signed by the President in February 2025 effectively makes it impossible for the US to have one.
5. Tougher Financial Regulations
How It Works: Governments crack down on financial speculation, currency manipulation, and the risky behavior that causes crashes.
Pros:
- Reduces market craziness and financial scams.
- Helps prevent the next banking crisis.
Cons:
- Wall Street hates it and fights back hard.
- Nearly impossible to enforce globally.
Likelihood: 7/10 – Regulation has increased since 2008, but progress is slow. But in the US, President Trump has signed an executive order freezing all financial regulation.
6. Partial Gold-Backing for Currencies
How It Works: Instead of a full gold standard, some currencies get partially backed by gold or commodities like oil.
Pros:
- People might actually trust fiat currencies again.
- Makes it harder for governments to print money willy nilly.
Cons:
- Gold prices bounce around too much for strict backing.
- Limits what central banks can do during crises.
Likelihood: 3/10 – Many central banks are stockpiling gold, but full transition is unlikely.
7. Trading in Local Currencies, Not Dollars
How It Works: Countries skip the dollar middleman and trade directly in their own currencies.
Pros:
- Boosts economic independence.
- Reduces vulnerability to US monetary policy shifts.
Cons:
- Many currencies are too unstable for global trade.
- US has massive influence to slow this down.
Likelihood: 7/10 – China, Russia, India, and Brazil are already doing this for trade between their respective countries, but adoption remains slow elsewhere.
8. Regulated Crypto Integration
How It Works: Governments incorporate regulated cryptocurrencies (like stablecoins) into traditional financial systems.
Pros:
- Faster, more transparent transactions.
- Less reliance on old-school banking.
Cons:
- Crypto prices swing wildly and regulation is a mess.
- Security risks and scams everywhere.
Likelihood: 5/10 – Governments are exploring this, but major hurdles remain.
Signs That a Global Currency Reset May Be Approaching
Want to spot the warning signs? Here’s what to watch for:
1. Central Banks Hoarding Gold
China, Russia, and others are buying gold like it’s going out of style. They’re preparing for something, and it’s probably not because they like shiny objects.
2. Debt Through the Roof
Government debt is exploding worldwide. At some point, the music stops – through inflation, devaluation, or outright defaults.
3. Countries Ditching the Dollar
Major economies are quietly finding ways to trade without dollars. Each new agreement chips away at dollar dominance.
4. Digital Currency Rush
Central banks are racing to develop CBDCs. Why the hurry? They’re positioning for the next phase of the monetary game.
5. Wild Currency Swings
When major currencies start behaving erratically, central banks might be testing the waters for bigger changes.
6. New Global Money Rules
Keep an eye on announcements from the IMF or G20 about new financial frameworks or reserve systems.
7. Weird Interest Rate Moves
If central banks make unexpected policy shifts, they might be trying to manage debt before a bigger reset.
8. Wall Street's Secret Moves
When big banks and hedge funds suddenly change strategy, they often know something the public doesn’t.
9. Bypassing the Dollar
Countries setting up direct currency exchanges tells you they’re building a system that doesn’t need the dollar.
10. Public Uproar
When people get fed up with inflation and instability, politicians start floating radical solutions.
History of Past Global Currency Resets
Sometimes a view of the past gives us insight into what might be on the horizon. Here are a few currency resets that changed the global financial system.
The Bretton Woods Agreement (1944)
After World War II, 44 countries met in a New Hampshire hotel and rewrote the rules of money. They pegged the dollar to gold at $35 an ounce and made other currencies peg to the dollar.
This created stability that fueled post-war growth. The dollar became the world’s go-to currency. But by the late 1960s, America started printing more dollars than it had gold to back them. This led to…
The Nixon Shock (1971) and PetroDollar System
In 1971, Nixon slammed the gold window shut. Other countries couldn’t trade their dollars for gold anymore. The fixed exchange system collapsed overnight.
To keep the dollar on top, America cut a deal with Saudi Arabia in 1974:
- The Saudis would price oil only in dollars.
- They’d invest their profits in US Treasuries.
- America would provide military protection.
This clever arrangement kept the dollar dominant even without gold backing.
The Dollar's Continued Dominance
Despite challenges, the dollar still rules because of:
- The oil trade runs on dollars.
- US financial markets are huge and liquid.
- Treasury bonds are considered ultra-safe.
- Old habits die hard (60% of global central bank reserves are still in dollars).
Countries are trying to reduce their dollar dependence, but any real change will be slow and probably messy, not an overnight reset.
How to Prepare for a Global Currency Reset
As you’ve probably gathered, we don’t believe a global currency reset will be an overnight crash. We expect it be a slow, drawn-out process with a crisis or two (or ten) thrown in for good measure.
But please make no mistake—these changes are not going to be made for our benefit. If we want to avoid it (or *whisper*… even prosper), we need to prepare.
That’s what we do for clients… and what we’ve done for more than four decades now. Here are some things to consider:
#1: Hold Different Currencies
Different currencies have different personalities. They respond differently to crisis. Look at more stable ones that tend to go up if the US dollar drops.
#2: Buy Precious Metals and Commodities
Moving out of fiat currencies and into assets known as a hedge against inflation… Gold, silver, and other tangible assets.
#3: Invest in Real Estate
Property investments in countries not (as) tied to the US economy and that operate on different fundamentals. Our clients have done especially well in markets where fundamentals are driven by expat populations.
#4: Find a Safer Bank
The US banking system is a lot of things, but stable is not one of them. The FDIC is woefully underfunded and would require a bailout if the system started to collapse.
On the other hand, banking systems in some other countries are a lot safer.
#5: Look at Offshore Structures
Offshore LLCs, offshore trusts, and other structures can offer a way to protect your wealth in a way domestic options cannot. Assets held in such structures could not only protect your assets from frivolous lawsuits but also policy changes that could restrict your ability to move money internationally.
But make sure they’re the right fit for your situation.
There are a lot of people in this industry who are happy to sell you an offshore trust or related without actually checking to see if you need it.
Make sure you work with a qualified professional who will take the time to understand your situation before you shell out thousands of dollars on something you might not actually need.
#7: Consider Second Residencies and Second Citizenship
Having a “bolthole” in another country will give you a place to go if we have a SHTF kind of moment. Residency can be an easy first basic step. Citizenship gives you the most flexibility but can take a while to qualify for.
Through all of this, as much as you can, look for opportunities that are “negatively correlated” with US investments. That’s a fancy way of saying that it’s best to look for investments that will actually do better when the dollar dives or the US market crashes.
Now, I will admit this is a lot harder to do than in decades past. Uncle Sam is everywhere. But if you know where to look, those options are out there.
Is cryptocurrency good diversification?
We first covered cryptocurrencies in 2015. At the time, we considered it a wildly risky speculation that’s worth a few bucks if you don’t mind taking a chance.
That said, we’ve had clients who’ve made a real fortune from the play, including one who went from broke to a legitimate multi-billionaire.
And no doubt, it’s exciting. But is crypto good for diversification?
That really depends on your goals. If your objective is to preserve what you have, then no, there’s too much volatility and downright fraud built into this business. It may have a role as an inflation hedge, but so does gold… and gold’s got a much longer track record.
But if you’re doing it for speculation with the potential to juice your returns, it might be worth some attention.
Could a Global Currency Reset Effect Second Citizenship Programs?
It’s a good question. The powers that be make no secret that they don’t like programs that grant citizenship (or even residency that leads to citizenship) in exchange for money.
On the other hand, for some of these governments, citizenship-by-investment and residency-by-investment programs make up a big part of their countries budget and/or foreign investment. They simply can’t afford to give them up wholesale.
So as we move towards a change in the structure of the global system, we expect to see pressure on these programs. But we don’t expect them to disappear entirely.
Even if there is no global currency reset...
I learned long ago that the most dangerous number in business was one. One supplier. One customer. One way to get new business.
The same is true with investments and planning.
Yet most Americans have all of their assets in one country, one asset class, one broker, one currency, and exposed to one economy. Not a good idea. They have one passport and one residency, with no way to leave if the factors that could lead to a reset hit too close to home.
The world is changing… and not for the better. The decades-long American-led order is under pressure.
The dollar’s path is clear; only the timing is uncertain.
The country is tearing itself apart with no end in sight, no matter who controls Congress, the White House, or the Supreme Court.
It’s up to you to protect those you care about. A good plan will help you do that. If you’d like some help doing that, feel free to get in touch.
About The Author
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We have 40+ years experience helping Americans move, live and invest internationally…
Need Help?
We have 40+ years experience helping Americans move, live and invest internationally…
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