The USA should plan to have less control over the world’s financial system by the year 2035
Because a crypto powered parallel banking system will arise outside of the USA’s direct control.
The contribution of this essay is to suggest that the USA should plan to have less control over the world’s financial system by the year 2035.
The US Dollar’s dominance as the global reserve currency and the USA’s associated policy tools will necessarily decline in next couple decades. This will happen regardless of whatever reasonable actions the USA might take.
One favorable action the USA can take is to begin laying the groundwork for a US Dollar digital currency[1].
A crypto powered parallel banking system will arise. Large portions of the global economy will run on it. There will be multiple such platforms in competition, at least Ethereum vs a forthcoming Chinese system.
The US Dollar’s dominance as the global reserve currency and the USA’s associated policy tools will be weakened due to large scale, global, transnational commerce becoming increasingly practical on a crypto powered banking system outside of the USA’s direct control. A contributing factor will be easy access of crypto powered anonymous banking for rogue nations and criminal organizations.
Cryptocurrency will be a big win for Americans and humanity. The benefits of blockchain will enable many transformative consumer experiences, reduce the tens of billions of dollars that Americans spend on bank fees every year, and bring advanced financial services to billions of people worldwide, including 1.7 billion people who don’t have a bank account today.
[1] Appendix: a good scenario for a US Dollar digital currency might look something like this:
The year is 2029. A farmer in a developing country runs her life with a crypto powered app similar to WeChat. The app is built and regulated in the USA using US Dollar digital currency. The farmer’s transactions are denominated in US dollars. The farmer’s savings account interest rate is a function of Federal Reserve monetary policy. The farmer (or her village, region, country) voluntarily adopted the USA’s app. They might have chosen China’s WeChat instead.
