TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Currency dominance in the digital age

For more than 80 years, the United States dollar has enjoyed unrivaled supremacy in world trade and finance. But a new variable is poised to reshape the global monetary order: data integrity.

Hélène Rey (The Jakarta Post)
Premium
Project Syndicate/Paris
Fri, August 1, 2025 Published on Jul. 30, 2025 Published on 2025-07-30T10:29:08+07:00

Change text size

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Representations of cryptocurrency Bitcoin are seen  on Nov. 25, 2024 in this illustration photo taken. Representations of cryptocurrency Bitcoin are seen on Nov. 25, 2024 in this illustration photo taken. (Reuters/Dado Ruvic)

F

or more than 80 years, the United States dollar has enjoyed unrivaled supremacy in world trade and finance, thanks to the US' unique combination of economic scale, credible institutions, deep and liquid financial markets and geopolitical might, as well as, crucially, network effects. But a new variable is poised to reshape the global monetary order: data integrity.

As digital technologies increasingly act as the rails upon which money moves, through stablecoins, tokenized assets and central bank digital currencies, the resilience and credibility of currency networks increasingly hinge not only on macroeconomic fundamentals, but also on the technological strength and security of the relevant infrastructure. Of course, macroeconomic fundamentals still matter, and digital currencies raise some conventional macro challenges. In particular, by privatizing seigniorage and facilitating tax evasion, stablecoins could shrink countries’ fiscal revenues.

Moreover, if a stablecoin breaks its peg, say, because its liquidity buffers prove insufficient, its credibility could collapse, triggering a run. If the stablecoin’s interconnections with other assets is sufficiently dense, this may have systemic consequences. A disorderly run on US dollar stablecoins, privately issued digital tokens that are backed significantly by US Treasuries and can theoretically be exchanged one-for-one with dollars, could prove particularly disruptive. Opacity in reporting and auditing, and insufficient regulations in some jurisdictions, compound the risks.

But such “classic” credibility issues are just the beginning. The world could also face a new kind of “cyber” run, triggered by weaknesses in the technological infrastructure underpinning digital assets. Mitigating this risk will not be easy: as the National Institute of Standards and Technology of the US Department of Commerce warned in 2016, quantum computers may soon be able to break many of the public-key cryptosystems currently in use. In other words, infrastructure that appears robust today may turn out to be flimsy tomorrow.

The implications for the global monetary order are far-reaching. As the issuer of the dominant international currency, the US has long enjoyed an “exorbitant privilege,” which includes the ability to borrow at low interest rates even in times of economic stress and run persistently large trade deficits. 

US President Donald Trump’s administration seems to be betting that the US will be able to retain this privilege, as the dollar’s existing global status translates into demand for US dollar stablecoins and, in turn, US Treasuries, thereby lowering the US Treasury’s financing costs.

Viewpoint

Every Thursday

Whether you're looking to broaden your horizons or stay informed on the latest developments, "Viewpoint" is the perfect source for anyone seeking to engage with the issues that matter most.

By registering, you agree with The Jakarta Post's

Thank You

for signing up our newsletter!

Please check your email for your newsletter subscription.

View More Newsletter

Ultimately, America’s exorbitant privilege is based on trust in its institutions, legal frameworks and fiscal capacity. In a world where money circulates on programmable platforms, however, the credibility and integrity of the code, the quality of cryptographic standards and the resistance of systems to hacking are as important as any of these factors. This fundamentally changes the logic of monetary competition: if the technological gap is large enough, the currency that is best protected from cyber threats, not necessarily the one backed by the most powerful economy or the most credible central bank, becomes the most attractive.

to Read Full Story

  • Unlimited access to our web and app content
  • e-Post daily digital newspaper
  • No advertisements, no interruptions
  • Privileged access to our events and programs
  • Subscription to our newsletters
or

Purchase access to this article for

We accept

TJP - Visa
TJP - Mastercard
TJP - GoPay

Redirecting you to payment page

Pay per article

Currency dominance in the digital age

Rp 35,000 / article

1
Create your free account
By proceeding, you consent to the revised Terms of Use, and Privacy Policy.
Already have an account?

2
  • Palmerat Barat No. 142-143
  • Central Jakarta
  • DKI Jakarta
  • Indonesia
  • 10270
  • +6283816779933
2
Total Rp 35,000

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.

Share options

Quickly share this news with your network—keep everyone informed with just a single click!

Change text size options

Customize your reading experience by adjusting the text size to small, medium, or large—find what’s most comfortable for you.

Gift Premium Articles
to Anyone

Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!

Continue in the app

Get the best experience—faster access, exclusive features, and a seamless way to stay updated.