Mark Carney Proposes Replacing The US Dollar With A Central-Bank Crypto

Mark Carney, the Governor of the Bank of England, proposed an idea of replacing the US dollar with a central bank-issued cryptocurrency similar to Facebook’s Libra. As we reported in the previous altcoin news, he even stated that he believes the US dollar will eventually be replaced by cryptocurrencies.

Just a few days ago, while addressing the Federal Reserve Symposium in Jackson Hole, Wyoming, Mark Carney described the Brexit uncertainties and the persistent world trade tensions will weaker business activity and they are also deteriorating the global economy. He also pointed out that because of globalization and the widespread dominance of the United States dollar, the US developments have huge implications in the world market in terms of trade and financial conditions including the countries that have a small exposure to the US economy. He explained:

 “In particular, growing dominant currency pricing (DCP) is reducing the shock-absorbing properties of flexible exchange rates and altering the inflation-output volatility trade-off facing monetary policymakers. And most fundamentally, a destabilizing asymmetry at the heart of the IMFS is growing. While the world economy is being reordered, the US dollar remains as important as when Bretton Woods collapsed.”

He also warned that these dynamics had increased the risks of a ‘’global liquidity trap.’’ Given the new economic environment, Mark Carney called for a huge improvement of the structure of the current IMFS and in order to create a better IMFS, he advised that the countries have to consider every opportunity including those who presented by new technologies. In his speech at the Federal Reserve Symposium, Carney was more specific and he put forward the idea of a Synthetic Hegemonic Currency which is provided by the public sector and he stated:

 “An SHC could dampen the domineering influence of the US dollar on global trade. If the share of trade invoiced in SHC were to rise, shocks in the US would have less potent spillovers through exchange rates, and trade would become less synchronized across countries.”

To strengthen his case, the CBE chief noted that the retail transactions mainly happen online via digital payments and the high costs of the domestic and cross-border transactions are the ones that boost the innovation as explained in the latest cryptocurrency news.