MercoPress. South Atlantic News Agency

FT says Trump teams evaluating dollarization of Argentina's economy

Trump remains committed to “maintaining the strength and power of the dollar,” as Beijing pushes for the use of other currencies

Sources close to US President Donald Trump said the Republican administration was actively discussing a strategy to encourage several countries to adopt the greenback as their official currency, the Financial Times (FT) reported on Sunday. The move would seek to curb China’s growing influence and maintain the dollar's global dominance.

 According to the FT, US government officials from the Treasury and the White House have held various meetings with dollarization expert and Johns Hopkins University Economist Steve Hanke. “It's a policy they're taking very seriously, but it’s still in progress. No final decisions have been made yet,” Hanke told the Financial Times.

Some US policymakers view Argentina as the “leading candidate” for dollarization, given the country's severe financial instability and the “frequent loss of confidence in the Argentine peso.”

Hanke, who advocates for the policy, considers Argentina an “obvious candidate” for dollarization, heading a list that also includes Lebanon, Pakistan, Ghana, Turkey, Egypt, Venezuela, and Zimbabwe. Hanke argues that Argentina's chronic mistrust of its peso has led to massive capital flight, stating that 76% of the country’s debt since 1995 has vanished due to this outflow.

The discussions in Washington are driven by concern over Beijing's efforts to promote the use of alternative currencies, diminishing the dollar's role in cross-border transactions among emerging markets.

White House Deputy Press Secretary Kush Desai confirmed the meetings with Hanke but emphasized that the administration has not yet made an official policy decision, though President Trump remains committed to “maintaining the strength and power of the dollar.”

Meanwhile, both the Argentine and US governments have publicly stated that dollarization was not actively under consideration at this time. Argentine Economy Minister Luis Toto Caputo dismissed the idea as a short-term option in early October, citing a critical lack of dollar reserves needed for the transition. “There are many ways to dollarize, but we believe that we do not have enough dollars to do so at this time,” Caputo has said.

The report also noted a warning from the International Monetary Fund (IMF), which believes dollarization could potentially condemn Argentina to “low growth” by forcing it to fully adopt the monetary policies of the US Federal Reserve.

The Financial Times reports that the White House is concerned about pressure from Beijing for emerging markets to use the dollar less in international transactions.