Jamie Dimon says the dollar could lose reserve-currency status if the US loses its economic and military edge

The dollar could eventually lose its status as the world’s reserve currency if the US fails to maintain its economic and military dominance, JPMorgan Chase CEO Jamie Dimon said.

“If we’re not the strongest military in 25 years and the strongest economy, we won’t be the reserve currency either,” Dimon said on PBS’ “Firing Line with Margaret Hoover,” which aired over the weekend.

“The world will be fragmented, and it’ll be very dangerous for us,” Dimon added.

The dollar remains the world’s dominant reserve currency, accounting for about 57% of global foreign-exchange reserves, down from around 70% at the turn of the century.

The freezing of Russian central-bank assets after Russia’s 2022 invasion of Ukraine fueled concerns that the US’s use of financial sanctions could accelerate a shift away from the dollar. So far, however, Federal Reserve research has found no notable post-2022 shift out of dollar reserves.

For Dimon, maintaining America’s economic and military edge also means reducing its dependence on potential adversaries for strategically important goods.

The US should have recognized 10 or 15 years ago that it was relying on China for rare earths, aluminum, certain types of steel, and other equipment, he said.

“We can’t rely on China for that, we can’t allow mercantilist behavior, we need to do it here, we made a mistake,” Dimon said.

Dimon then pointed to the war in Iran as evidence of another vulnerability: America’s ability to sustain a prolonged war.

“The war in Iran has pointed out we didn’t have productive capability to defend the United States if there was a real war that lasted for a long period of time,” Dimon said. “And that’s a hell of a statement.”

Addressing those weaknesses has become urgent, he said.

In October, JPMorgan launched a $1.5 trillion, 10-year Security and Resiliency Initiative focused on industries crucial to US economic security, from critical minerals and advanced manufacturing to energy, defense, AI, and quantum computing.

Dimon said at the time it had become “painfully clear” that the US was too reliant on unreliable sources for critical minerals, products, and manufacturing essential to national security.