Lazard Ltd. CEO Ken Jacobs claims that cryptocurrencies might be a viable alternative for the U.S dollar as a reserve currency. He was speaking during a recent interview with Bloomberg when he stated that digital currency has proven that the U.S dollar is not ideal as a reserve currency.
The U.S dollar has been used as the international reserve currency for more than 50 years. Jacobs stated that cryptocurrencies such as Bitcoin (BTC) threaten the U.S dollar’s position as the reserve currency. The Lazard CEO stated that the world currently has a lot of technologies that could become alternatives for the future, and he pointed out that the cryptocurrency market.
Other economies are growing stronger
The U.S dollar has been facing a lot of pressure from other currencies especially from the other thriving economies all over the world. The Yen and the Euro are some of the examples but the rise of the cryptocurrency market has ushered in more possibilities especially for global transactions. They present a faster and cheaper approach towards facilitating digital transactions.
China, for example, has been taking up a leadership role in the financial markets and global trade. The U.S has also been losing traction on its relationship with Europe and these factors have been discrediting the U.S dollar as the reserve currency.
“To the extent that we have unilateral foreign policy and unilateral trade policy, we’re sort of tempting the world to find an alternative. Probably the greatest demonstration of soft power is the fact that the U.S. has the reserve currency of the world,” stated Jacobs.
Banks want to get in on the action
Numerous banks have already started adopting blockchain technology while some are already experimenting with their own digital currencies, thus giving rise to the idea of centrally controlled digital coins. One such example is MUFG, the biggest bank in China which has been exploring with its own digital currency.
Jacobs’ statement suggests that a cryptocurrency might replace the dollar as the reserve currency. However, it would probably take some time before such a shift takes place especially since cryptocurrency developments are still going on and the technology has just started to go mainstream.