IMF Head Economist Affirms Crypto Won’t Be Replacing the Dollar

The United States dollar has quite a significant role to play in international trade but worries have been in the background about cryptocurrencies having an impact on this. Gita Gopinath, the chief economist at the International Monetary Fund (IMF) has said that digital assets like Bitcoin aren’t going to be challenging the crucial role the dollar plays in this sector.

Gopinath took over the IMF this time last year and wrote that despite cryptocurrencies being represented as an interesting possibility, the infrastructure and worldwide adoption is lacking.

Gopinath said:

"Advances in payment technologies do not address fundamental issues of what it takes to be a global reserve currency. The dollar’s status is bolstered by the institutions, rule of law and credible investor protection that the U.S. is seen as providing."

Mark Carney, the governor of the Bank of England has indicated in the past that a central bank digital currency backed by a basket of reserve currencies could benefit national economies as globalisation continues.

Over the past 12 months, central banks have started to discuss the launch of their own digital currencies. The People's Bank of China (PBOC) has even announced that it was getting close launching its long-in-development digital yuan as an alternative initiative like Libra.  

As per CoinDesk:

“Federal Reserve Chairman Jay Powell said in November the U.S. central bank was exploring whether a digital dollar would even benefit the U.S. economy. The new chief of the European Central Bank, Christine Lagarde, also recently said her institution should be “ahead of the curve” when it comes to CBDCs, though it needs to be clear on the objectives of a potential digital euro.”

It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!