How Digital Currency May Challenge The Dollar’s Dominance
October 1, 2019
The current currency system could be upended in the near future, as central banks around the world begin to explore issuing their own digital currency. A lengthy report from the Wall Street Journal examined the issue and found that governments are increasingly warming to the idea of digitizing their national currencies, issuing money that exists only digitally, similar to the way bitcoin and other cryptocurrencies function.
The WSJ notes that such a move would have profound implications on almost every aspect of the economy. The role of commercial banks, which now function as an intermediary between the central bank and consumers, would likely change dramatically. A national virtual currency would allow money to change hands in a much simpler and streamlined way.
The move could also spark a new currency war. National currencies that allow money quickly, cheaply transfer across the globe could challenge the hegemony of the American dollar. The WSJ notes that China is likely to be the first to make such a move, and could digitize their currency as soon as this year.