The governor of the Bank of England ( BoE ), Mark Carney , in a meeting with central banks around the world in Wyoming, predicted that a cryptocurrency backed by several nations could surpass the US dollar as the world reserve currency. As such, it will end the hoarding of fiat by governments and improve world trade.
Global cryptocurrency to replace the US dollar
According to sources close to the matter, Mark Carney is of the opinion that a global digital currency could dethrone the US dollar which is dominant as the world reserve currency, a scenario that would significantly help improve world trade and reduce the volatility of capital flows in emerging markets. .
The governor of the Bank of England says that the exclusive control of the dollar over international monetary markets and their level of dominance in these markets make it a barrier to sustainable recovery.
In addition, governments around the world have stored dollars to protect against changes in the US economy, which has been increasing lately.
On the other hand, the hoarding of fiat has had an adverse effect on the economy, which is evident in the long low inflation rate of a decade, low interest rates and the significant increase in the cost of loans.
Cryptos to rescue the world economy
To that end, Carney strongly believes that a possible solution that will reduce the dominant influence of the USD on world trade, dampen its control over global financial conditions and stimulate the economy is a global digital currency based on blockchain .
According to Carney, a virtual currency of this nature will be backed by several nations and will help unlock USD reserved as an insurance policy in times of economic turbulence.
“IF THE PROPORTION OF TRADE BILLED IN A DIGITAL CURRENCY INCREASES, SHOCKS IN THE UNITED STATES WOULD HAVE LESS POTENT SIDE EFFECTS THROUGH EXCHANGE RATES, AND TRADE WOULD BE LESS SYNCHRONIZED BETWEEN COUNTRIES,” HE SAID.
Reportedly , the crypto version of the Chinese currency, the renminbi and the Facebook Pound , are cited as potential currencies that could replace the dollar.
However, Carney has pointed out that none of these can become an alternative to the dollar; instead, the use of new technologies to develop a new cryptocurrency could create a worthy rival for the US dollar.
In addition, Carney said the world is moving fast, thanks to DLT, and that more online retail payments are being made through electronic payments instead of the main use of cash as was the case in the past.