The U.S. dollar could lose its status as the world’s leading reserve currency if the United States cannot maintain its economic and military supremacy. This warning comes from none other than Jamie Dimon, chairman and CEO of JPMorgan Chase (JPM), the largest U.S. bank.
“If we don’t have the strongest military and the strongest economy in 25 years, we will not be the reserve currency,” Dimon said on the PBS program “Firing Line with Margaret Hoover,” which aired last weekend. His grim forecast: “The world will be fragmented, and that will be very dangerous for us.”
The dollar remains the backbone of the global financial system. Its share of worldwide foreign exchange reserves currently stands at approximately 57%. While this represents a noticeable decline from roughly 70% at the turn of the millennium, there is no evidence of a dramatic collapse so far. After Russia’s invasion of Ukraine in 2022 and the subsequent freezing of Russian central bank reserves by the U.S., concerns flared that the use of financial sanctions could trigger an accelerated shift away from the dollar. However, research by the Federal Reserve has found no significant flight from dollar holdings since 2022.
For Dimon, however, the issue goes beyond reserve status. It is about America’s strategic sovereignty. The JPMorgan chief sharply criticized his country’s dependence on China for a range of raw materials and products essential to national security. “We should have realized 10 or 15 years ago that we are dependent on China for rare earths, aluminum, certain types of steel, and other equipment,” he said. “We cannot rely on China for this, we cannot allow mercantilist behavior, we have to do this domestically — we made a mistake.”
As evidence of another existential vulnerability, Dimon cited the Iran War, which he said exposed the limited industrial capacity of the United States for a prolonged conflict. “The war in Iran showed that we did not have the production capacity to defend the United States if there were a real war that lasts a long time,” Dimon stated. “And that is a damn serious statement.”
Addressing these weaknesses is urgently necessary, the bank chief emphasized. JPMorgan Chase launched a 10-year Security and Resiliency Initiative in October of last year. With a volume of $1.5 trillion, it aims to strengthen industries critical to U.S. economic security, including critical minerals, advanced manufacturing, energy, defense, artificial intelligence, and quantum computing. At the time of the announcement, Dimon said it had become “painfully clear” that the U.S. was too dependent on unreliable sources for raw materials and products essential to national security.
Dimon’s warning comes at a time of increasing geopolitical fragmentation and recurring questions about the dollar’s dominance. His remarks underscore that, in his view, reserve currency status is not a given, but a direct function of American strength — and that he currently does not consider that strength sufficiently secured.