About
The digital asset landscape is complex and is still emerging. A number of critical variables and dynamics must be captured, including decentralization, privacy, security, efficiency and innovation. The technologies themselves continue to evolve, often very quickly, as do the regulatory and political contexts. New systemic risks may arise as the use of digital assets grows. Developments are taking place amid heightened geopolitical tensions, and digital assets are increasingly relevant in the dynamics relating to dollarization, financial settlement and payment systems and the role of the US dollar as a reserve asset.
A series of papers will explore the different roles that digital assets can take as geopolitical dynamics and financial assets interact, considering various scenarios of the global order and the future technological environment. Lessons from past reserve currencies and assets will be examined to understand the potential for digital assets to encroach on traditional financial assets. The evolution of digital money is a critical variable in the broader economic system and its governance, including the role of the International Monetary Fund, the World Trade Organization and other global institutions. Policy opportunities and implications for the future of international finance — given shifts in international financial flows, in particular the use of the US dollar to settle international trade — and the potential role of digital currencies will be considered.
