Ripple CTO, David Schwartz, recently spoke about the US dollar’s usage as a global settlement currency is shrinking, although he noted that he doesn’t expect another currency to be able to replace it soon.
David Schwartz, the CTO at Ripple, recently shared his thoughts regarding the role of the USD in the global economy. He said that the dollar’s use as the world’s settlement currency has started to shrink.
However, he also doesn’t believe that any single crypto or fiat currency will be there to take this opportunity to replace it. In fact, he does not expect it to happen anytime soon, even with all the stablecoins around. Schwartz believes that there will be a lot of currencies fighting for dominance, and that this situation will remain for quite a while.
Financial leaders of the world are discussing a global stablecoin
About a week ago, The G20 FSB (Financial Stability Board) revealed a new roadmap regarding international payments. The roadmap also served to point out some advantages of using stablecoins, although it also assessed and underlined some risks of doing it.
Its members are working in partnership with other major financial entities, such as the World Bank, the IMF, and similar financial organizations. Their goal is to create a regulatory framework that would define and regulate CBDCs (Central Bank Digital Currencies).
It is also worth noting that the IMF held a conference yesterday, October 19th. During the conference, the Bank for International Settlements’ (BIS) general manager, Agustin Carstens, noted that there is a strong need for tight cooperation between the world’s central banks.
Such joint efforts could indicate that there is a possibility of creating a global stablecoin. If all of these countries could collaborate and agree on common regulations for a stablecoin that would then be accepted in all of them, such a cryptocurrency would, in theory, be capable of replacing the USD.
However, even while knowing this, Schwartz continues to claim that there will be no single asset that would be able to rule over the rest of them.
Unanswered questions standing in the way
The same belief is actually held by a CBDC leader of the Bank of Japan, Kazushige Kamiyama. He recently said that many are rushing to issue a CBDC, hoping that the first-mover advantage would help them stand out and rise above the rest.
However, Kamiyama stresses that this advantage could easily turn into a disadvantage. He further noted that he does not believe that any single digital currency would be able to dominate the world.
Bank of Japan (BOJ) is still monitoring the progress of other countries in order to keep track of new developments. However, there are a lot of unanswered questions regarding CBDCs, which is also something that the US Fed’s chairman, Jerome Powell recently pointed out.
Powell stated that the US does not plan to issue its own crypto for the time being — at least not until it can answer all the questions regarding such a coin. He stressed that it would be more important and more beneficial to do the launch of a CBDC right, than to do it first.
There is still a possibility that joint efforts could bear fruit in this regard, as financial experts of many countries could reach valuable conclusions more quickly, and then work on the creation of a coin as a joint effort. However, this is all still only an idea, and seeing this situation unravel in practice might be an entirely different experience.
