JPMorgan suggests for the US to develop digital currency. The firm, who has launched its own coins, has suggested that the US should invest in developing a digital dollar to maintain its place in the global economy.
The firm shared, “Offering a cross-border payments solution built on top of a digital dollar would, particularly if designed to be minimally disruptive to the structure of the domestic financial system, be a very modest investment to protect a key means to project power in the global economy. For high-income countries and the U.S. in particular, digital currency is an exercise in geopolitical risk management.”
This comes after JPMorgan’s analysts warned that the rise of digital currencies may dampen the dominance of the US dollar and SWIFT.
Analysts at JPMorgan including Josh Younger, head of US interest-rate derivatives strategy, and Michael Feroli, chief US economist, have expressed their analysis in a report saying “There 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.”
Additionally, analysts indicate that the US will face difficulties in implementing sanctions and terrorist-financing measures with SWIFT (Society for Worldwide Interbank Financial Telecommunication) facilitating global and local financial flows through its messaging system and with the dollar serving as the world reserve currency.