The United States could lose its position as issuer of the world's primary reserve currency if its military and economic leadership wanes, according to JPMorgan Chase chief executive Jamie Dimon.
Speaking in an interview with PBS, reported by Fortune, Dimon stated that if the country does not maintain the strongest military and economy over the next 25 years, it will also lose its reserve currency privilege. He warned that a decline in American strength would leave the international order fragmented and create severe dangers for the nation.
Dimon leads New York-based JPMorgan Chase, the largest commercial bank in the United States by total assets. His remarks reflect growing concern among financial leaders about sovereign risk and global geopolitical stability.
Military Power and Investor Security
Financial experts interviewed by Fortune said American military and economic power are tightly linked to the dominance of the dollar. Daniel McDowell, associate director of the Moynihan Institute of Global Affairs at Syracuse University, explained that economic performance serves as the foundation of the dollar's global role, while military power acts as an essential supporting factor.
McDowell said a powerful military enhances the appeal of the American currency by signaling to foreign investors that their assets in the United States are secure. A weakening of America's military position could also lessen the willingness of international allies to purchase US government bonds and invest directly in the domestic economy.
He added that a large-scale conflict with a major power such as China or Russia resulting in a decisive American defeat poses another critical risk. According to McDowell, such an outcome would negatively affect US political and economic authority alongside global investor perceptions of the dollar.
Institutional Strength and Currency Alternatives
Economists emphasize that military force alone does not guarantee reserve currency status. Eswar Prasad, a senior fellow at the Brookings Institution, noted that domestic institutions and economic dynamics are far more important, particularly an economy's capacity to innovate and allocate resources efficiently.
Prasad acknowledged that any decline in American economic and military power, internal institutions, or geopolitical influence would harm dollar dominance. However, he concluded that the lack of credible alternatives will prevent any competing currency from displacing the dollar as the principal international payment and reserve currency in the near term.
Global Wealth Managers Reduce Dollar Holdings
Dimon's warning comes as wealthy international investors move to reduce their exposure to the US currency. A report by Swiss banking group UBS revealed that the world's richest families have begun cutting their dependence on the dollar.
According to the UBS survey, roughly two-thirds of family offices expect confidence in the dollar as a world reserve currency to weaken over the coming year. Rising geopolitical tensions and expanding US national debt are driving family offices to re-examine portfolio risks across global markets.
