The company said that countries will be able to reduce their dependence on the dollar by developing their digital payment systems, but this will not happen in the near future. At the same time, China proposed creating a single stablecoin for Asian countries
No country can suffer more from the disruptive potential of the digital currency than the US, said Josh Younger, head of interest rate derivatives strategy at JPMorgan, and economist Michael Feroli. According to them, the United States risks losing its geopolitical power. This will happen if States issue separate national cryptocurrencies or a single reserve currency, reports Bloomberg.
"The risks relate to the hegemony of the us dollar. The issue of a global reserve currency, which will act as a means of exchange in international trade in goods and services, has huge advantages," the experts explained.
They noted that this is an incentive for Central banks to introduce their digital payment systems. However, their appearance is unlikely to lead to a large-scale transformation of the economy and the international market, JPMorgan representatives stressed.
From their point of view, the global reserve currency will not appear in the near future. But if this happens, the impact of the dollar is likely to weaken, particularly in trading calculations and in the SWIFT system. If other countries are able to circumvent SWIFT, it will become much more difficult for the US to apply sanctions and dictate the terms of compliance with its laws. Moreover, the European Union may be interested in this, analysts concluded.
Digital currency of Asia
On may 21, Shen Nanpeng, a member of the People's political Advisory Council of China and managing partner of Sequoia Capital, suggested that the government issue a stablecoin that will be backed by a basket of four Fiat currencies. These will include the Chinese yuan, Japanese yen, Korean won and Hong Kong dollar, local publication Chainnews reports.
Shen Nanpeng explained that the issue of stablecoin will simplify and accelerate cross-border transfers in the Asian region, as well as reduce the costs associated with the conversion of funds. In addition, the digital currency will be an example for other Central banks and will be "the key to the recovery of the Asian economy after the coronavirus pandemic". However, Shen's initiative does not specify whether the proposed solution will be based on blockchain.
In mid-April, a similar project was proposed by the Libra Association, which develops the Facebook cryptocurrency. The company decided to abandon plans to create a single digital currency, instead issuing several stablecoins, the rate of which will be linked to various national currencies. These include the dollar, Euro, British pound, and Singapore dollar.
