Major global economists credit Facebook's Libra with pushing the world to start reconsidering the U.s. dollar as anchor currency.

At a January. 23 panel at the annual Earth Economical Forum (WEF) in Davos, officials and fiscal experts discussed one of the most important mechanisms in the global financing organization — the U.South. dollar, which has become the world'south reserve currency.

Libra evoked a future digital currency

Called "Challenging the Dominance of the Dollar," the panel focused on factors that make the U.South. dollar the globe's dominant payment arrangement and reserve currency, equally well as the fact that countries over the globe are trying to reduce their dependency on the dollar.

The panel featured a number of officials including Brazil'south Economy Minister Paulo Guedes and Gita Gopinath, chief economist at the International Budgetary Fund (IMF). Hosted by Adam Tooze, director of the European Institute at Columbia Academy, the panel also included Portugal'southward Finance Government minister Mario Centeno and Zhu Ning, a professor of finance at Tsinghua Academy.

Gopinath, who is as well a director at IMF'south enquiry department, opened the panel with comments that named Facebook's cryptocurrency initiative Libra as a major factor that fabricated anybody in global finance reconsider the condition of the dollar as anchor currency.

Brazil's Economy Minister supported the statement, adding that new technologies like blockchain are paving the way for time to come currency that will be digital:

"Then and then there is the new technology, the digital, the blockchain. [...] The Libra episode is just evoking a hereafter digital currency."

U.S. dollar is still attractive

Gopinath connected the U.S. dollar even so remains bonny, pointing out that one of the most important features that make the U.S. dollar attractive is trust and stability:

"Why is it that the dollar has such dominance? It does considering it is the currency that provides the best stability and safe. [...] It makes consummate sense to concord your value in dollars because if things get bad, information technology gains value."

Digital currency initiatives trigger changes in the global financial system

The fact that WEF economists now agree that Facebook's Libra has pushed global authorities to start reconsidering their approach to the world'due south reserve currency, is definitely reinforcing the status of emerging fintech technologies as well every bit blockchain.

Meanwhile, some officials take already warned that projects like Libra tin take a huge impact on the U.Due south. dollar. In August 2019, Mark Carney, the governor of the Banking concern of England, suggested that Libra-like digital currency could supersede the U.South. dollar as the globe's reserve currency. Carney said that replacing the dollar with a digital currency would be a better pick than assuasive its reserve status to exist replaced past another national currency such as China'south renminbi.

Every bit reported past Cointelegraph, Libra initially proposed to back its crypto projection past several national currencies including the U.S. dollar, euro, Japanese yen, British pound and Singapore dollar, allegedly excluding the Chinese yuan from the grouping of reserve assets.