THE HIGH STAKES OF THE COMING DIGITAL CURRENCY WAR
By Kenneth Rogoff
Just as technology has disrupted media, politics, and business, it is on the verge of disrupting America’s ability to leverage faith in its currency to pursue its broader national interests. The real challenge for the United States isn’t Facebook’s proposed Libra... It’s government-backed digital currencies like the one planned by China. Facebook CEO Mark Zuckerberg was at least half right when he recently told the United States Congress that there is no U.S. monopoly on the regulation of next- generation payments technology. You may not like Facebook’s proposed Libra (pseudo) cryptocurrency, Zuckerberg implied, but a state-run Chinese digital currency with global ambitions is perhaps just a few months away, and you will probably like that even less. Perhaps Zuckerberg went too far when he suggested that the imminent rise of a Chinese digital currency could undermine overall dollar dominance of global trade and finance – at least the large part that is legal, taxed, and regulated. In fact, U.S. regulators have vast power not only over domestic entities, but also over any financial firms that need access to dollar markets... as Europe recently learned to its dismay when the U.S. forced European banks to comply with severe restrictions on doing business with Iran.
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American Consequences
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