The greenback’s share of global foreign-exchange reserves has extended a decline.
As reported by official sources, the dollar will not be overtaken as the world’s leading reserve currency anytime soon.
Cryptocurrencies can replace government-backed currencies. Such digital currencies are “mined” and transferred via a decentralized network of computers without any issuing authority. Such a system would prevent countries from printing money since the supply of cryptocurrency is limited, much like the gold standard.
It is not by incident that more and more countries are shifting to using alternative currencies shand this process will be gaining momentum.
The emergence of digital currencies, both private and official, is shaking up domestic and international finance. Consider international payments. They involve multiple currencies, payment systems operating on diverse protocols, and institutions governed by varying regulations. As a result, cross-border payments have tended to be slow, expensive, and difficult to track in real time. New technologies spawned by the cryptocurrency revolution now make for cheaper and practically instantaneous payment and settlement of transactions.
Even central banks of China, Hong Kong SAR, Thailand, and the United Arab Emirates are getting into the game, using the new technologies to increase the efficiency of payment and settlement mechanisms for cross-border transactions by their domestic financial institutions.
Digital technologies enable new forms of money that could challenge fiat currencies and set off a new era of domestic and international currency competition.