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Is America Losing the Digital-Currency Race?

With the explosive proliferation of cryptocurrencies, including China's introduction of a digital renminbi, it is not surprising to hear panicked warnings about the looming decline of the dollar. But the truth is that the greenback is the prime beneficiary of today's market developments.

WASHINGTON – America’s global position is slipping. The reign of the dollar is waning as China, Russia, and other potentially hostile countries digitize their currencies and create parallel payment networks that can circumvent the long arm of US and Western sanctions.

Or so we’re told. This narrative has been gaining traction among Western central banks, think tanks, and national-security analysts, who are right to be concerned about the future of money and payments.The Bank for International Settlements (a veritable central bank of central banks) recently released a report suggesting that central banks should introduce central bank digital currencies (CBDC) to keep Big Tech out of national payment systems.

It is certainly true that in the long run, the US dollar’s continuing dominance as the world’s most trusted global reserve currency is not guaranteed. But with the future of money and payments, past is prologue. Today’s doomsayers are wrong to think that the United States is losing ground. Such arguments in the media may help to attract clicks and drive engagement online, but they ignore the new elephant in the room: privately issued digital currencies, many of which are “stablecoins.”