Digital currencies could ruin US dollar global dominance

12 months ago

JPMorgan Chase & Co analysts have warned that there is no other country that could lose more than the United States from the destructive potential of digital currencies.

According to Bloomberg, JP Morgan, head of derivatives strategy, Josh Younger, and US chief economist, Michael Feroli, warned that the destructive nature of digital currencies could do the most harm to the US. Analysts believe digital currencies could ruin US dollar global dominance.

The hegemony of the US dollar, as a global reserve currency, largely rests on the exchange regime and is currently key to international trade in goods and services.

In the short term, analysts do not expect the dollar to lose its status as a global reserve currency. But they point to specific weaknesses in the dominance of the US currency, which include trading settlements and the SWIFT messaging system in the banking sector.

Analysts at JP Morgan believe that building up initiatives regarding digital currencies is a key US monetary policy challenge.

A report from JPMorgan Chase & Co emphasizes that “digital currency is becoming an important equation in managing geopolitical risk.” Therefore, to fully manage these risks, one cannot exclude the use of the potential of digital currencies.

Nevertheless, analysts expressed the opinion that the proposal of some senators to use the digital dollar for cross-border payments will have minimal consequences for the internal financial structure, that is, with modest investment of funds, this area is simply vital to develop in order to strengthen the US geopolitical position in the global economy .

Considering that China is preparing to become the first major country to release its digital currency (DC / EP) and has already introduced the world mobile app for the digital renminbi, the United States has not much time left to counter any concrete steps to the impending threat from China .

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