Bank of England Governor, Mark Carney, has indicated a revolutionary overhaul of the existing financial system by proposing Facebook’s Libra-like digital currency to replace the US dollar dominance.

Putting forth his opinion at the Federal Reserve’s annual gathering at the Jackson Hole on Aug 23, the economist, banker and the digital currency supporter urged that the central banks and governments need to pay more heed to the digital reserve currencies, such as the Libra, to bring about a radical shift in global monetary system.

It was just two months ago when the Bank of England (BOE) Governor advocated widespread adoption of Facebook’s global cryptocurrency, Libra, to end the trade wars and the impending crisis of the growth economy. According to him, the US dollar needs replacing, and there is no way better to do it than introducing a digital alternative.

End the US dollar monopoly, insists Bank of England Governor

Although Carney did not refer to Libra as a potential replacement, his remarks emphasized on propelling increased interest in cryptocurrencies for a global reserve currency. He vehemently argued that the US dollar monopoly could be ended by using a universal digital coin, rather than allowing another fiat currency, such as the Chinese Renminbi, to outperform it. 

Carney insisted that the seismic change can only occur when technology takes over one currency’s dominance and develop a balanced and efficient system.

US trade relations are causing global economic uncertainty. A large group of countries accumulates the US dollar as indemnity against the precarious economies, and this has dramatically spiked the borrowing costs. A global digital currency, BOE Governor contends, could unlock the stockpiled US dollars and shrink the sovereignty of the US dollar on global trade.

While a succession of governments and central banks have criticized Libra and the lack of governance and administration around the currency, Carney, on the other hand, expressed optimism by stating that the electronic payments are the new face of retail. He believes that internationally-backed stablecoin, which could be exchanged on messaging platforms and other participating retailers, will make the cash obsolete and improve cross-border payments.

While the US dollar’s complete replacement may not be on the cards yet, Carney’s statements do instigate insights on significant implications of pursuing digital currencies on monetary and financial stabilities around the world.