According to a report covered by Bloomberg, the banks chief U.S. economist asserted that [t]here is no country with more to lose from the disruptive potential of digital currency than the United States.
This revolves primarily around U.S. dollar hegemony. Issuing the global reserve currency and the medium of exchange for international trade in commodities, goods, and services conveys immense advantages, the report added.
Blockchain undermines US dominance over trade finance
While JPMorgan doubts the dollar will be displaced as the global reserve currency soon, the report warns that fragile peripheral aspects of the currencys dominance may be eroded, including trade finance and the SWIFT messaging system.
During March, eight major banks including HSBC and Citi announced that a collaboratively developed blockchain trade finance will see a commercial launch in Singapore during the second half of 2020.
Digitizing the dollars dominance
The report advocates that the U.S. launch a digital dollar project in order to migrate its monetary dominance into the rapidly growing digital sphere.
JPMorgan warns that other countries could use digital currencies to circumvent the SWIFT system and the reach of economic sanctions, undermining the ability for the United States to exercise power on a global stage through control over the global reserve currency.
Offering a cross-border payments solution built on top of a digital dollar would, particularly if designed to be minimally disruptive t ...