Bitcoin Cryptocurrencies

Bank of England Governor believes a digital currency could soon replace the dollar

Bank of England governor Mark Carney has suggested that the American dollar could soon be replaced with a digital currency similar to Facebook’s Libra.

While delivering his speech at the U.S Federal Reserve’s annual symposium in Jackson Hole, Wyoming, Carney said that a Libra-like digital currency could replace the U.S dollar as the World’s reserve currency. Carney went on to say that replacing the U.S dollar as we know it, with a digital currency would be way better than allowing its reserve status be usurped with a another national currency.

Dollar could be replaced by Chinese currency

Carney was particularly concerned about the possibility of the U.S dollar being replaced by China’s renminbi. He added that a new “synthetic hegemonic currency could be best provided by a public sector through a network of central bank digital currencies:

“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.”

Back in July, Carney argued that the size of the Facebook Libra project has to be virtually perfect at the outset in order for it to be released at all saying;

“It’s either successful or it isn’t. If it’s successful, it becomes systemic, because it would involve a very large number of users. And if you’re a systemic payment system, it’s 5-sigma. You have to be on all the time. You can’t have teething issues. You can’t have people losing money out of their wallets.”

Bitcoin not a legitimate currency

Back in February 2018, Carney claimed that Bitcoin (BTC) cannot be considered a legitimate currency by traditional definitions, neither a means of exchange nor a store of value. Carney’s opinions clash with those of Bitcoin proponents such as Billionaire investor Tim Draper who is a major BTC bull who believes that BTC is currently undervalued.

Bitcoin proponents such as Draper also disagree with opinions such as Carney’s, since they believe that BTC can be used in every day transactions, as means of exchange, and also as safe stores of value. The most recent and potent pro-Bitcoin argument has come after the disappearance of Billions of savings money in Ghanaian savings accounts following a government crackdown. The crackdown led to the shutdown of several fund managers, with some 70,000 people unable to access their savings.  Crypto enthusiasts did not waste any time pointing to Bitcoin as the solution. According to a crypto enthusiast known as Rhythm trader, fund management does not need an intermediary.

Image Courtesy of Pexels

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