In an important announcement which could possibly have a far-reaching impact on the cryptocurrency sphere, Mark Carney, governor of Bank of England has opined that reliance of the world on the US dollar as a primary Fiat currency is not a good indicator and could possibly spell trouble for the global economic situation. Carney proposed that a new digital currency could possibly replace the over-emphasis on the US dollar. The announcement can be easily considered as an indication of the world’s more positive attitude towards digital currencies and widening acknowledgment about the merits of digital coins.
Emphasis on new Digital Currency
In a conversation with CNBC on the sidelines of the annual conference on the Federal Reserve, Carney made these comments and said that in a multi-polar world economy, it is required to have a multi-polar currency system rather than betting excessive reliance on one particular currency like US dollar. The governor further said that he proposes a new digital currency based on the global products and services basket, which is essential to create a kind of equilibrium. This observation is especially relevant in the context of a situation where we are seeing many countries in the global economy moving towards negative interest rates or zero interest rates. However, there are some countries where interest rates still happen to be on the positive side and include the likes of the US and India.
Procedural Hurdles and Requirements
The more relevant question, however, Carney emphasized on the procedure on how to reach a consensus on launching the digital currency, and in his own words, the problem is that starting something new is not an overnight decision and required considerable deliberations among the stakeholders. It would be a lengthy process, but if everything falls in place then we could soon possibly witness the launch of a global digital currency.
Global Trade War: A worrying Situation
The discussions also went further deliberating on the ongoing tension between the US and China, which is termed as a trade war between two countries. Both of the countries are slapping import duties on each other’s products, and Carney said that this ongoing trade war is detrimental to the prospects of overall economic growth and sentiments. He cited the example of various disruptions happening in the range of industries including automobile, supply chain, steel industry, and technology, and Governor said that even countries which are not directly involved in the trade war, the impacts are hurting their economies and prosperity as well. The negative sentiments of a trade war are casting a negative outlook for the overall world’s economic growth and should be dealt with urgency to safeguard prospects of the global economies.
Just so you know, Carney was once considered as one of the favorite contenders for the chief of International Monetary Fund (IMF); however, he failed to garner support from the various nations in Europe and hence, lost out on the opportunity. He has been operating as a governor of the Central Bank of England since 2013.