Time for Asian cross-border digital payment innovation
Given its fintech prowess and world-leading CBDC work, China can play a pivotal role in driving digital currency co-operation in Asia. Alternatively, the region’s more digitally-savvy countries could come together to explore a Diem-like digital currency for Asia.
IN AUGUST 2019, Mark Carney, then governor of the Bank of England and former chair of the Financial Stability Board, an international body that monitors and makes recommendations about the global financial system, called for a global monetary system to replace the US dollar.
He explained that “…the dollar accounts for only 10 per cent of global trade and 15 per cent of global GDP but half of trade invoices and two-thirds of global securities issuance.... countries are forced to self-insure and hoard dollars to guard against potential capital flight, leading to excess savings and lower global growth…”
The ill effects of “helicopter money” (aka quantitative easing) -- new US dollar money printed on a massive scale and distributed among the public to stimulate the economy during a recession -- are also well documented. They include causing runaway asset prices benefiting the rich and exacerbating social inequality; rising global inflation; dollar debt distress among many developing countries; and growing risks to financial stability.
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