IMF chief economist: digital currencies cannot replace US dollar

In the near future, digital currencies will not be able to shift the US dollar from a dominant position, says Gita Gopinat, chief economist at the International Monetary Fund (IMF).

In an article for the Financial Times, the IMF chief economist emphasized that Facebook’s plans to launch Libra took the discussion about creating “public digital currencies” by central banks to a new level.

Thus, the head of the Bank of England, Mark Carney, declared the feasibility of creating, by analogy with Libra, a digital means of payment that could replace the US dollar as a global reserve currency. Nevertheless, Gopinatus does not agree with this statement.

She noted that digital currencies may have “intriguing capabilities,” but in the near future it is highly unlikely that they will be able to squeeze the US dollar as the dominant currency.

One of the main obstacles to the massive introduction of digital currencies, according to the IMF chief economist, is the lack of necessary infrastructure.

She also noted that emerging markets prefer to use the dollar rather than digital currencies.

“When governments, investors and traders are faced with choosing a digital currency for cross-border operations, they pay attention not only to the same factors as in the past - liquidity, stability, convertibility - but also to other things, such as the technological superiority of the issuing country . This last problem can be a decisive factor, given concerns about privacy and security when using digital media, ”said Gopinat.