Bank Of England Governor Says Crypto Could Displace The US Dollar
Bank of England governor Mark Carney says that a central-bank supported digital currency could replace the US dollar as the worldâ€™s hedge currency as we can read in the reports made today in the coming altcoin news.
Speaking at the Economic Policy Symposium in Jackson Hole, Wyoming on Frida , the Bank of England governor discussed the need for a new and international monetary and financial system nothing that while the US dollar has the dominant role in the monetary and financial systems around the world in the past century, the recent developments such as the increased globalization and trade disputes could have strong impacts on national economies at the present moment more than they did in the past. Carney noted that the US dollarâ€™s use in international securities issuance makes it a primary currency for international traders and the fact that the companies use dollars shows that is still the dominant currency. However, the developments in the US economy, by affecting the dollar exchange rate could have a huge spillover effect to the rest of the world according to Carney:
Â â€œWhile the world economy is being reordered, the U.S. dollar remains as important as when Bretton Woods collapsed,â€™â€™
Carney suggested there could be multiple replacements to the dollar including the Chinese renminbi and the digital currency supported by the international coalition of the central banks:
Â â€œIt is an open question whether such a new Synthetic Hegemonic Currency (SHC) wouldÂ be best provided by the public sector, perhaps through a network of central bank digital currencies. An SHC could dampen the domineering influence of the U.S. dollar on global trade.â€™â€™
As explained previously in the best cryptocurrency news sites, the technology can disrupt the current network effects that could protect the dollar noting that an increasing number of transactions could occur online by using electronic payments rather than cash. While he did not state cryptocurrencies explicitly, he did note that the relatively high costs of the domestic and cross border electronic payments are encouraging innovation with some new entrants applying new technologies to offer lower costs. One example is Facebookâ€™s libra crypto project as he noted but in order for the project to succeed, Carney stated:
Â â€œThe Bank of England and other regulators have been clear that unlike in social media, for which standards and regulations are only now being developed after the technologies have been adopted by billions of users, the terms of engagement for any new systemic private payments system must be in force well in advance of any launch.â€�
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