Mark Carney, the Governor of the Bank of England, has proposed a transformation of the global financial system, replacing the US dollar with a digital currency similar to Facebook’s Libra.
“The US dollar as a reserve currency must end.”
Speaking at the US Federal Reserve’s annual symposium in Jackson Hole, Wyoming, Carney said a Libra-like digital currency could replace the US dollar as the world’s reserve currency, Bloomberg reported on August 23.
Carney indicated that the position of the US dollar as the world’s reserve currency must end, and that some form of global digital currency – such as Libra – would be a better option. That would be preferable to allowing the dollar’s reserve status to be replaced by another national currency such as China’s renminbi.
“In the longer term, we need to change the game,” Carney said. “When change comes, it shouldn’t be to swap one currency hegemon for another.”
He added that a new “synthetic hegemonic currency” can best be delivered by the public sector through a network of digital currencies from the central bank:
“The combination of increased economic policy uncertainty, downright protectionism and concern that further negative shocks could not be adequately compensated due to limited policy space, exacerbates disinflationary bias in the global economy.”
Libra is planned as a global digital currency that could be outside the direct control of central banks and has since received many negative responses from both national and international regulators.
In July, Carney argued that, due to the huge size of the project, Libra should be almost perfect from the start to be released at all, saying:
“It is successful or not. If it is successful, it becomes systemic because it would involve a very large number of users. And if you are a systemic payment system, it is 5-Sigma. You always have to be there. You cannot have teething problems. You can’t let people lose money from their wallets.”
In February 2018, Carney claimed that, according to traditional definitions, Bitcoin (BTC) cannot be considered a legitimate currency – neither a means of exchange nor a value premium.