Gita Gopinath stressed that the US national currency continues to play a dominant role in terms of the global financial system, international trade, and the operation of payment systems.
The use of the digital yuan will not significantly reduce the role of the dollar in the world soon. This opinion was expressed on Tuesday by the chief economist of the International Monetary Fund, Gita Gopinath, at a virtual event organized by Bloomberg.
When asked if the digital yuan could become a threat to the dollar, she replied: “As for China, they said that right now they are focused on the domestic application of [digital currency], and if they ever switch to an international application, they will work with the international community to ensure that everything goes smoothly for the recipient country.” “As for the question of whether the Chinese yuan can digitally replace the dollar, I am quite skeptical,” the IMF’s chief economist added. She stated that the dollar continues to play a dominant role in terms of the global financial system, international trade, and the operation of payment systems.
According to Gopinath, some other currency, to “take on this role, must occupy a very strong position in some institutions.” According to the expert, for this purpose, the country that issues the specified currency should ensure compliance with the rule of law, ensure “trust in public institutions,” and “protect investors.” “So you need to meet many requirements. I would say that China is still in the early stages in terms of developing many of the infrastructure elements necessary for the currency to play a dominant role in the world,” said the IMF’s chief economist.
When asked whether the bitcoin cryptocurrency could pose a threat to the dollar, Gopinath replied: “I strongly disagree with this. I don’t understand how this is possible.” She believes that bitcoin now “does not play the role of money at all” and is a means for “speculative investments.”
Earlier, Bloomberg, citing sources, reported that the administration of US President Joe Biden is collecting data on China’s plans regarding the use of the digital yuan. According to the agency, some American officials fear that Beijing may try to use this currency to reduce the role of the dollar in the world.
China is one of the world leaders in developing its own digital currency that can be used even without a cellular signal and Internet access. In August last year, the People’s Bank of China (Central Bank) reported that the People’s Republic of China is conducting internal closed testing of the digital yuan in various cities. Still, there is no exact schedule for its release yet.