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BoE Governor Mark Carney Suggests Global Cryptocurrency

Bank of England Governor Mark Carney proposed replacing the US dollar with a central bank-issued cryptocurrency such as Facebook Libra.

Carney proposes the synthetic hegemonic currency. On August 23, 2019, while Carney spoke at the Federal Reserve Symposium in Jackson Hole, Wyoming, how Brexit uncertainties, continued tensions in world trade, and overall weaker business activity are worsening the global economy.

US Dollars, US developments have significant global impact on trade and financial conditions, even in countries with relatively low direct exposure to the US economy. The BoE Governor states:

"In particular, increasing Dominant Currency Pricing (DCP) is reducing the shock-absorbing properties of flexible exchange rates and changing the trade-off between inflation and production volatility vis-à-vis policy makers. And basically there is a destabilizing asymmetry growing in the heart of the IMFS. As the world economy rearranges, the US dollar remains as important as the collapse of Bretton Woods.

He also warned that this momentum has increased the risks of a "global liquidity trap".

The International and Monetary System Improvement Needs

Considering the new economic environment, Carney called for a radical improvement in the structure of the current IMFS (international monetary and financial system). In order to create a better IMF, he advised countries to consider every opportunity, including those offered by new technologies.

As previously reported by Bitcoinist the bank governor already had his openness to the idea of ​​a cryptocurrency issued by the central bank.

In his speech at the Federal Reserve Symposium, Carney went into more detail. He proposed the idea of ​​a synthetic hegemonic currency (SHC) provided by the public sector, "possibly through a network of digital currencies".

"An SHC could dampen the dominant influence of the US dollar on world trade, and if the share of SHC-charged trade increased, US shocks would have less impact on exchange rates, and trade would intervene Synchronized less with the countries. "

To reinforce his argument, the CBE chief emphasized retail outlets increasingly online through digital payments.The high cost of domestic and cross-border electronic payments boosted innovation.For example, Carney mentioned the scale of And he pointed out

"Technology has the potential to disrupt network externalities that prevent the reigning global reserve currency from being ousted."

Believe, one from the central bank spent synthetic hegemony The digital currency will overthrow the US dollar, leave it to us know in the comments below.

Courtesy of Shutterstock, Bank of England and Bank of America. Merrill Lynch Global Fund Manager

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