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Digital Currency Revolution Series: British Central Bank Seems Interested in Libra
Recently, the Chinese central bank ‘PBoC’ issued a statement in a response to the US' labelling China as "currency manipulator". The Chinese central bank defended that the CNY depreciation is largely due to change of market conditions, and blamed that the US accusations are groundless. While they made an announcement of approval from the state administrative authority to start working on a national digital currency in order to combat the uncertainty of Libra, as per the Chinese reports.
Now, Bank of England Governor appears to be bullish on Gov't-Backed Digital Money. Replacing the U.S. dollar with a digital currency backed by the central banks could prove to be a boon for the international financial system and reduce the impact of U.S.-based economic shocks on the rest of the globe, Bank of England chief Mark Carney said Friday.
Mr. Carney has made a radical recommendation for the central banks that the U.S. dollar could be replaced with a Libra-like cryptocurrency.
Very recently, in an interview at the Federal Reserve’s annual Jackson Hole Symposium, Carney hinted that there is going to a dramatic shift in the monetary policy outlook that the central banks’ are perceiving a greater interest in crypto-assets such as Facebook’s libra.
While the rumours are lingering that Governor’s proposal would replace the U.S. dollar as the world’s reserve currency with a digital alternative.
While it was unclear if Carney was actually suggesting that libra could be used to fill the void, his intent was to spur interest in a fiat alternative for global reserves.
Carney also highlighted the global economic slowdown being caused by the deteriorating U.S. trade relations, “the combination of heightened economic policy uncertainty, outright protectionism, and concerns that further, negative shocks could not be adequately offset because of limited policy space is exacerbating the disinflationary bias in the global economy.”