The steady transition to a cashless economy, accelerated by the COVID-19 pandemic, combined with the development of transformational new financial technologies is driving a range of institutions to re-imagine core elements of the financial system. Technological and geopolitical trends are converging to lead a widespread transformation within the international financial system, pushing it to be both more inclusive and efficient as well as more competitive and unpredictable.
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. 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. 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.
The development of new financial technologies and their adoption by nation states and private actors is unleashing transformative effects on the international financial system.
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