The development of new financial technologies and their adoption by nation states and private actors is unleashing transformative effects on the international financial system. Though the dollar remains the dominant international currency today, there is contentious debate over whether it can be, or is in the process of being, replaced.
While another fiat currency replacing the dollar in the short term remains unlikely, the development of digital currencies in the form of central bank digital currencies (CBDCs), de-centralized cryptocurrencies, and private-sector digital currencies all pose threats to the U.S.’s ability to continue capturing gains from current systems, leveraging dollar centrality to enforce sanctions, and otherwise influence international financial transactions over the longer term.
Our 3-part series, The Future of Money, breaks down the technologies and geopolitical forces shaping the global financial landscape and is a critical resource for those looking to better understand and navigate its rapid transformation.
PART 1
EMERGING CHALLENGES TO U.S. DOLLAR SUPREMACY
Driven by perceived U.S. sanctions overreach, numerous countries now seek to circumvent the dollar-dominated financial system. Emerging technologies are paving the way.
SECTION 1
U.S. Control of the International Financial System and Sanctions Overreach
Graphic 1: International Financial Messaging and Settlement
Graphic 2: The Increasing Use of U.S. Sanctions Under Trump Administration
SECTION 2
Challenges to the Dollar and Existing Financial Infrastructure
Graphic 3: Global Foreign Reserves Composition
Graphic 4: SWIFT Alternatives
SECTION 3
The Domestic and International Implications of China's Digital Renminbi
Graphic 5: Breakdown of China's Digital Renminbi (DCEP)
Graphic 6: Timeline of Digital Renminbi Development
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