Cryptocurrencies such as Bitcoin are impacting the US dollar's status as a world currency.
Recently, the International Monetary Fund warned that central banks should reconsider their reserve allocation. Among them is a point of concern: The International Monetary Fund believes that the outbreak of the new crown epidemic has promoted the rapid growth of financial technology, and the most prominent technology is cryptocurrency.
This is very understandable, because the epidemic is no longer going to offline transactions, and the impact of the epidemic is similar to the Fed's simple and rude money printing method to hedge trade risks:
On the one hand, inflation of the U.S. dollar has emerged, threatening the status of the U.S. dollar as a world currency; on the other hand, not all countries’ online transactions are as convenient as Alipay and WeChat in our country. What should we do if the epidemic comes? Cryptocurrency has become a ready-made online payment method. Therefore, the impact of cryptocurrency on sovereign currencies is not small.
Many central banks are now aware of the threat of private digital currency issuance. For example, Facebook's Diem has been publicly dissed by the President of the European Central Bank and others, thinking it will cause financial threats. And Facebook had to rename Libra to Diem also revealed the obstacles it faced in the process of debut.
At the same time, some central banks are trying to counter this threat by issuing their own digital currencies.
An IMF blogger stated: "The potential competition from private issuers such as Diem (Facebook's blockchain-based payment system) has stimulated major central banks to accelerate their work on central bank digital currencies and cross-border payments."
This round of warnings from the International Monetary Fund is actually to make all countries pay more attention to the development of digital currencies and encrypted currencies.
Because the wave has arrived, no one can refuse.