The Bank of England governor, Mark Carney, has challenged the position of the dollar as the world reserve currency and says it could be replaced by a global digital alternative currency.
According to Carney, the dollar has reached a level of dominance that makes it a barrier to sustainable development and recovery globally.
Half of all international trade is priced to dollars, but its fives time greater than the U.S. contribution to the world’s outlet, along with two thirds of world’s securities priced to the dollar. The problem there is that the U.S. exchange policy becomes exported to other parts of the world, which is not the most optimal way to run things.
“A digital currency could dampen the domineering influence of the U.S. dollar on global trade. If the share of trade invoiced in [a digital currency] were to rise, shocks in the U.S. would have less potent spillovers through exchange rates, and trade would become less synchronized across countries.” ~ Mark Carney.