The dollar’s leadership is no longer guaranteed… Do digital currencies determine America’s future?
The US needs to act urgently, in order to maintain its lead in the financial infrastructure coding race.
Writer Jay Clayton says this the report The value of Bitcoin and the rest of the tokenized assets (so called because their ownership is documented by a unique digital token recorded on the books of the blockchain) has recently exceeded $3 trillion.
The writer adds that the race is now taking place in the scope of coding all forms of financial assets, and this includes ownership, rights and obligations, in the field of blockchain, which has become clearly superior to the traditional financial infrastructure.
There are billions of dollars in tokenized assets that are traded daily in the markets around the clock, and this emerging cryptocurrency is just the prominent part of the financial and information technology revolution, as there is another part that is not receiving much attention, which is an interconnected network of payment, credit and securities technologies. These markets are worth hundreds of trillions of dollars, and almost everyone uses and depends on these markets, and they are now ready to undergo drastic changes.
While the trading of securities and other financial transfers are taking place instantly, many other processes are still going at turtle speed, within the framework of a legislative and operational system that has not developed in decades.
Mortgage, for example, is only done by passing through a number of stages and procedures, and it may take days or weeks. But through coding, a large part of this cumbersome and complex process can be shortened, with more accurate data and stronger protection.
The writer believes that the current financial system needs many improvements, with the aim of saving billions of dollars that go annually in unnecessary transactions, as well as to provide more and better options for the consumer.
The writer adds that the coding of sovereign currencies, securities, loans, real estate, and all payments and credit operations is a once-in-a-lifetime opportunity for smart investors and officials, and at the same time represents an existential threat to the interests of those who are not smart and foresight.
Regarding the role of governments in the midst of these changes, the author believes that the revisionist role remains necessary for the financial markets in order to ensure stability and encourage capital formation, prevent illegal activities, and protect consumers.
The US dollar’s leadership is no longer assured in the face of major technological changes.
But there is more that the US government must do. The innovators must obtain guarantees that when they abide by the restrictions and laws imposed by the state, they will have complete freedom to search for opportunities and profits in the market. The government should make an effort to facilitate the adoption of technology in payments and financing in US dollars. This amounts to a matter of national security and financial stability for Washington.
The United States is the most important financial market in the world, and theoretically all other markets around the world are linked to it. And when it exists, a central bank digital currency, the so-called “digital dollar,” is just the tree that hides the forest, so financial regulators, in coordination with the private sector, must also focus on the forest.
The leadership and stability of the dollar is a vital issue for the growth of the global economy and the achievement of national security and financial stability in the United States, but the leadership of the US dollar is no longer guaranteed in the face of major technological changes.
China views this technological shift as an opportunity for it, not only to achieve the operational effectiveness of its economy, but also to expand the influence of its currency (the yuan) in the areas of payment and lending. The Chinese authorities are supervising the implementation of digitization and coding operations, which allows them to more control and control the financial markets.
There is no doubt that the Chinese leadership plans to extend these practices to international trade, in order to extend its influence over the world economy.
There is no doubt that the Chinese leadership plans to extend these practices to include international trade, in order to extend its influence over the world economy. Therefore, the United States must understand that the race for the reserve currency has already begun, and it has no choice but to win.
The writer explains that timing has become an important factor in this race, as the United States must impose itself as a party that sets the standards in any technological shift, a role that is determined once, and then either gets it or loses it forever. By successfully setting standards that are accepted by all, you are guaranteed significant economic and financial benefits.
The author calls for cooperation between the public and private sectors, to search for ways to adopt coding in the US Treasury and finance market, to provide new services such as the immediate completion of trading, clearing and transactions.
The writer also points out that the United States will benefit greatly from modernizing the current financial system, instead of waiting for a new system to emerge, which will bring in large investments and human capital looking for this renewal.
In conclusion, the author called for the United States to walk the path of coding the financial infrastructure, in order to continue to fulfill its commitment as a guarantor of freedom and justice in the markets, the stability of the global financial system, and the achievement of the welfare of consumers in all countries.