U.S. structural monetary power in the era of digital currencies: the position of the dollar amid crypto assets, CBDCs, and the Digital Renminbi (2008-2023)

This paper analyzes the structural monetary power of the U.S. dollar in the era of digital currencies. Recent years have seen the flourishing of innovations such as private cryptocurrencies, crypto assets, stablecoins, and central bank digital currencies (CBDCs). As the world advances in the development of CBDCs, with China’s Digital Renminbi leading the innovation, the United States faces internal challenges in reaching a consensus on the potential creation of a digital dollar issued by the Federal Reserve (FED). How can we explain the fact that the issuer of the international currency and holder of the greatest structural monetary power is lagging behind in the issuance of its own digital currency? The study aims to verify the following hypotheses: i) the U.S. does not view the rise of digital currencies as a real threat to the structural monetary power of the dollar, and thus it is not a monetary priority; ii) the traditional banking sector’s lobbying is a hindrance to U.S. innovation, as its power would be diminished.

Keywords:
Digital currencies; Structural Monetary Power; United States; Digital Renminbi; Digital Dollar.