JPMorgan believes that the central bank’s digital currencies, or CBDC, could pose a threat to the global hegemony of the US dollar.
According to a report covered by Bloomberg, the bank’s U.S. chief economist said that „there is no country that would lose more, from the disruptive potential of digital currency, than the United States.
„This revolves mainly around the hegemony of the U.S. dollar. The issuance of the global reserve currency and the medium of exchange for international trade in products, goods and services brings enormous advantages,“ the report adds.
HSBC: Blockchain platform will keep trade finance smooth despite coronavirus
Blockchain undermines U.S. dominance over trade finance
While JPMorgan doubts that the dollar will soon be displaced Bitcoin Revolution review review – bitcoin charts Bitcoin Code – Immediate Edge problems buying – Bitcoin Billionaire iban and bic – Bitcoin Circuit acquires cryptocurrency trading platform paradex – how to use bitcoin wallet The News Spy – when Bitcoin Era adding ripple – Bitcoin Evolution good trader – Bitcoin Profit trading charts – get money from Bitcoin Trader as the global reserve currency, the report warns that „fragile“ peripheral aspects of the currency’s dominance may be eroded, including trade finance and the SWIFT message system.
During March, eight major banks, including HSBC and Citi, announced that a jointly developed trade finance blockchain would have a commercial launch in Singapore during the second half of 2020.
China’s foreign exchange regulator develops pilot trade finance blockchain solution
Blockchain-based trade finance initiatives have also been launched in China, Oman and Europe.
Digitizing the dollar’s dominance
The report calls for the U.S. to launch a digital dollar project to migrate its monetary dominance into the rapidly growing digital sphere.
Oman witnesses the first commercial financing transaction in blockchain
JPMorgan warns that other countries could use digital currencies to circumvent the SWIFT system and the scope of economic sanctions, undermining the ability of the United States to exercise power in a global setting through control over the global reserve currency.
„Offering a cross-border payments solution built on a digital dollar would be, particularly if designed to be minimally detrimental to the structure of the domestic financial system, a very modest investment in protecting a key means of projecting power in the global economy,“ the report said.
For high-income countries, and the US in particular, digital currency is an exercise in geopolitical risk management.
The Marco Polo trade finance platform of the blockchain Corda consortium shows its first transactions