IMF Chief Economist: National digital currency is fascinating, but it is impossible to replace the US dollar in the short term

Gita Gopinath, chief economist at the International Monetary Fund (IMF), said that the status of digital currencies has become increasingly prominent over the past few years, although this choice will not shrink the dollar from its status.

dollar-1362244_1280

Image source: Pixabay

Gopinas said in an opinion article in the Financial Times in January:

"Improvements in payment technology may have reduced the cost of switching from cash payments to digital payments, but there is little evidence that they have contributed significantly to reducing the cost of transferring money."

He also stated,

"People have a wide range of views on the security and stability of the U.S. dollar, and for decades the U.S. dollar has dominated the international monetary system."

Regulation and adoption of digital currencies

In June 2019, Facebook released a white paper based on Libra currency, a digital asset backed by a complete set of financial assets and currencies. Since then, the project has met with strong opposition from regulators.

In addition, countries like China are also involved, hoping to release their own national digital currency.

Gopinas wrote:

"Although these are fascinating possibilities, they are not possible in the short term."

Dollar elasticity

In theory, Gopinas mentioned the prominent role of the US dollar in global trade and banking, and the growing use of the US dollar-this is the domino effect.

The economist compared digital currencies with the euro, which cannot surpass the US dollar, and pointed out many aspects that promote the success and dominance of the national currency.

Gopinas also pointed out the institutional and investor protection measures within the US dollar, which strengthened the strength of the US dollar.

In short, Gopinas makes clear throughout her article that there are too many complex factors preventing digital currencies from trying to replace the US dollar.

According to a report from Cointelegraph, IBM predicts that a central bank digital currency will emerge in the next five years, and these waters may soon be tested.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Policy

FTX Customers Buckle Up! $9B Shortfall Claim Payout Expected to Roll Out by Mid-2024

Good news for fashion lovers! FTX has reached a settlement with their debtors and creditors, potentially returning $9...

Blockchain

Bybit Airdrop Gifts are available for a limited time! Teach you how to receive 1632 USDT in 10 minutes!

Bybit, this is a professional derivatives exchange with nearly 70% overseas users, with a daily trading volume of mor...

Finance

The Block Editor-in-Chief 5 Innovative Projects Worth Paying Attention to

Promising emerging projects include derivatives protocols, governance platforms, and infrastructure, among others. Au...

Opinion

Web3 Public Legal Education | Why is it best for blockchain startups to not issue tokens?

If traditional internet entrepreneurship is considered a high-risk endeavor, then starting a business in blockchain i...

Blockchain

After the FCoin thunderstorm, rethink everything about platform coins and centralized exchanges

Source of this article: Odaily Planet Daily , original title "In the lifetime, was it pitted by FCoin?" &#x...

Blockchain

Is the 'big boss' of the cryptocurrency world, Binance, starting to decline?

LianGuaiBitpushNews Mary Liu As 2022 comes to a close, it seems that Zhao Changpeng, co-founder and CEO of Binance, ...