Editorial

Could Blockchain end America’s global financial dominance?

“For decades, U.S. adversaries have been trying to evade and undermine this power, but there has been no way to conduct significant international commerce without moving through the pipes of the U.S. dominated global financial system. Now, new pipelines are being built.”

Posted 23 July 2019 by

A new report suggests Blockchain may have an unexpected negative dimension – the possible erosion of US global financial hegemony.

That’s in the shape of warnings contained in a new study from Right-of-Centre US foreign policy think tank The Foundation for Defense of Democracies (FDD), which warns countries could use distributed ledger to reduce the force of American economic sanctions.

‘Blockchain Technology’ on Flickr by surya s (c) All Rights Reserved

In Crypto Rogues: U.S. State Adversaries Seeking Blockchain Sanctions Resistance, the body claims that, “For decades, [our] adversaries have been trying to evade and undermine this power, but there has been no way to conduct significant international commerce without moving through the pipes of the U.S. dominated global financial system.

“Now, new pipelines are being built,” says the report, centred on corporate and government Blockchains that may form the “building blocks” of a system that could in “two to three decades” aid financial cooperation between adversarial countries, and have the means to “eclipse [America’s] financial power in much the same way that the dollar once eclipsed the British pound”.

The study points to public comments from the Russian government to do this, claiming that action is needed to “combat the excessive dominance of a limited number of reserve currencies”, including the dollar – and, chillingly, how a Russian intelligence officer in 2017 told an international Blockchain standards conference “the Internet belongs to the Americans — but Blockchain will belong to us”.

The study concludes with a number of positive recommendations, but notes that US policymakers and financial sector stakeholders will need to take the lead in the evolving international crypto-currency/cyber-security race:

“Washington must ensure that if Blockchain technology ascends, it develops in a way that will expand the transparency, freedom, and prosperity of the last century.”