According to JPMorgan’s chief economist, the central bank’s digital currency (CBDC) initially poses a risk to the United States and the hegemony of the dollar. However, the processing capacity of such a currency must be qualified, he said.
A report released by the Bank for International Settlements earlier this year was highlighted the growing interest of central banks in relation to the digital currency (CBDC). The Banque de France realized this on 14 May his first experiment. And others are on his agenda.
For the chief economist of JPMorgan Chase & Co.These initiatives should address the highest peak in the United States. “No country has more to lose disruptive potential the digital currency that the United States “warns Michael Feroli in a report.
Digital money: relative but real potential
He believes that the CBDCs pose a potential risk to US dollar hegemony, which is central to the global economy today. Michael Feroli still weighs this threat to the rule of the United States.
On the other hand, if he believes central bank issuance of digital currencies is likely, the economist considers the potential of such a financial instrument to be more moderate. According to him, the transformation capacity of the CBDCs is less than expected by some observers.
The greenback will not soon give up its role as the world’s reserve currency. Nevertheless, there are “weaknesses”. And these are likely to weaken the dominance of the dollar, the JPMorgan executive notes.
And the economist draws particular attention to the foreign exchange regulations and the SWIFT interbank system. The digital currency could thus represent an opportunity for other powers like Europeto reduce the U.S.’s impact on international payments.
The digital dollar as a means of safeguarding US rule
The share is not only financial but also geopolitical for the United States. For example, SWIFT and the hegemony of the dollar allow the US government to impose international sanctions.
The alternative faced with this potential risk is therefore the first service delivered a digital dollar ? JPMorgan analysts still believe that an international digital e-dollar payment solution would be “a very small investment.” “
This sensible investment, which aims to “disrupt the structure of the national financial system as little as possible”, could help “protect an important means of influencing the global economy”. “”
The central theme of the central bank’s digital currencies does not seem to be that of innovation and transformation. At least from the perspective of the American commercial bank.
For high-income countries, and especially the United States, the digital currency is an exercise in geopolitical risk management, ”she said.