Crypto Poses Danger To Dollar And SWIFT, JP Morgan Says
It’s been recently revealed that the analysts from JP Morgan are warning that the rise of crypto may hurt the dominance of the US dollar and SWIFT as well.
The importance of the US dollar
The US dollar is the world’s reserve currency, and it’s giving the US geopolitical power and easy access to capital. The dollar also allows the country to keep its status of the world’s leading political and economic power.
The Daily Hodl cites Bloomberg and reveals that JP Morgan analysts, including Josh Younger, head of US interest-rate derivatives strategy, and Michael Feroli, chief US economist, released an interesting report on the matter.
“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,” according to analysts.
They also mention SWIFT which is the traditional financial system used by banks and financial institutions for decades.
Analysts say that SWIFT is facilitating local and global financial flows via the messaging system, and the dollar is the world’s reserve currency – this means that the US will have problems in implement ting sanctions and terrorist-financing measures.
The US should invest in developing a digital dollar
Their solution is that the US should invest in developing a digital dollar in order to maintain its place in the global economy.
“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” analysts say.
The concluded by saying that for the US, digital currency is an “exercise in geopolitical risk management.”
Head over to Bloomberg’s article in order to learn more details.
Andreas Townsend Author
I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.