Altcoin News: Bank of England: Libra-Like Digital Currency Could End Dollar Hegemony
August 26, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
The head of the Bank of England, Mark Carney, expects that the global financial system can see a replacement of the US dollar as a reserve currency with digital currencies, such as developed by Facebook Libra, writes Bloomberg.
Speaking at a meeting of central bank executives in American Jackson on Friday, he said:
“The deficiencies of the international monetary and financial system have become increasingly potent,” Mr Carney said. “Even a passing acquaintance with monetary history suggests that this centre won’t hold.”
According to Carney, a more favorable scenario will be the replacement of the dollar with a digital currency than any other national currency, such as the Chinese yuan. Moreover, the most preferable option for such a currency seems to him to be a “synthesized dominant currency” developed in the public sector and combining digital currencies of various central banks. Libra can serve as one of the examples of such a currency, but not necessarily the best contender for this role due to its inherent risks.
The combination of increasing uncertainty in economic policy, overt protectionism and fears regarding future negative shocks, which may not find an adequate answer due to limited political space, exacerbate the deflationary bias of the global economy, he added.
Carney previously stated that Libra developers should make their cryptocurrency flawless if they expect to receive support from regulators:
“It will be either successful or not. If it is successful, it can become systemic, since a very large number of people will be involved in working with it. A system payment platform cannot even have a hint of problems. People must not be allowed to lose money from their wallets.”
Author: Marko Vidrih
