Crypto's Have ‘Intriguing Possibilities' But Won't Replace USD As Global Reserve Currency: IMF Chief

International Monetary Fund’s (IMF) chief economist, Gita Gopinath, said on Tuesday that digital currencies aren’t threatening the US dollar’s role in the global trade.

She also mentioned that while cryptocurrencies seem to offer intriguing possibilities, they still aren’t globally accepted and lack the infrastructure they need to defeat the US dollar in order to become a global reserve currency. Many voices in the financial sector have expressed the notion that virtual currency may challenge the power of the US dollar, including Mark Carney, Bank of England’s governor. Gopinath thinks that even if SHCs would rebalance the global trade, they’d need to be accepted on the global market, and this isn’t very likely to happen.

Many Central Banks Talking about Releasing Their Own Digital Currency in 2019

As reported by IMF, the US dollar represented more than 60% of the global exchange reserves in the third quarter of 2019, while the Euro comprised 20% of the same reserves. Also last year, many central banks have openly spoke of launching digital currencies, with People’s Bank of China (PBOC) noting this past summer it’s intention of issuing the digital Yuan in order to compete with private initiatives such as Libra.

Federal Reserve Chairman Jay Powell mentioned in Nov 2019 that even the US central bank is looking into how a digital dollar would bring benefits to the country’s economy, not to mention that Christine Lagarde, European Central Bank’s chief, has talked about a potential digital Euro.

The IMF Is Researching Digital Currencies

Back when Christine Lagarde was running the IMF in 2018, she said central banks should be serious about exploring the possibility of issuing CBDCs that would permit financial inclusion and increase payments’ privacy. However, the same IMF said CBDCs shouldn’t be adopted prematurely either.

Back in Sept 2018, it advised Marshall Islands officials to rethink the launch of a digital currency that would work together with the US dollar, as the country needed to introduce stricter anti-money laundering regulations. IMF mentioned that in case this wouldn’t happen, banking relationships with US banks would be lost and access to the US dollar decreased, which would cut the country from the global financial system.

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Oana Ularu
Oana Ularu
Curious about what’s going on with all the money in the world, Oana is bringing you the latest news in the crypto world. She’s aware of the fact that you need to know everything that’s happening on the financial scene in order to play the cryptocurrency market, so you can count on her to share with you every little detail on what matters.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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