Digital Currencies Threaten USD Dominance of Global Financial System (Source coinidol.com)

The Central Bank Digital Currency (CBDC) idea is gaining more and more traction today, with countries such as China, South Korea, Japan, France, and more exploring the possibility to introduce some sort of an equivalent of their local currencies in digital form. As coinidol.com, a world blockchain news outlet reported, China is now holding trials of its digital yuan in 4 locations across the country. Korea is also testing its digital won. Generally, around 46 central banks worldwide are exploring the possibility of launching their CBDC. However, as a survey shows, most of them have no actual plans for issuing their own coins. Nevertheless, the interest in the technology is significant. Even more to worry about by the US dollar is that the innovation around the CBDC growth has gone past the ordinary means of payments domestically, but countries are looking at a CBDC at interbank payment options as well as the internationalization of the CBDCs. A recent analysis by JP Morgan has warned the increasing adoption of digital currencies by countries could weaken the US dollar supremacy in the international financial arena. Although the analysis does not point to the US dollar being topped from its position by other currencies soon, it concluded that the US should be concerned about the recent developments in digital currencies. The US dollar is still the biggest and the only recognized reserve currency, however, its position is being challenged by the recent developments in the global financial system such as the rise of CBDCs.