IMF: LOCAL STABILITY CURRENCY MAY ACCELERATE DOLLARIZATION

IN A SPEECH AT THE UNIVERSITY OF CAPE TOWN ON 7 AUGUST, DAN KATZ, FIRST VICE-PRESIDENT OF THE INTERNATIONAL MONETARY FUND (IMF), SAID THAT THE LOCAL STABILIZATION CURRENCY COULD ACCELERATE THE USE OF THE DOLLAR. HE NOTED THAT LOCAL STABILIZATION CURRENCIES AIMED AT ENHANCING THE ROLE OF NATIONAL CURRENCIES COULD INADVERTENTLY MAKE IT EASIER FOR USERS TO SWITCH TO DIGITAL DOLLARS. KATZ MENTIONED THAT THE LOCAL CURRENCY AND THE DOLLAR STABILITY CURRENCY OPERATED ON THE SAME BLOCK-CHAIN INFRASTRUCTURE, WHICH COULD SIMPLIFY FOREIGN EXCHANGE CONVERSION, AND THAT USERS COULD EXCHANGE POINT TRANSACTIONS THROUGH DECENTRIZATION EXCHANGES, LIQUIDITY POOLS OR POINTS WITHOUT RELYING ENTIRELY ON BANKS AND TRADITIONAL CURRENCY DEALERS. THE IMF ASSESSMENT SHOWS THAT THE STABLE CURRENCY MARKET REMAINS CLOSELY LINKED TO THE UNITED STATES DOLLAR, WITH NEARLY 99 PER CENT OF THE STABLE CURRENCY DENOMINATED IN UNITED STATES DOLLARS. THE CASE OF SOUTH AFRICA SHOWS THAT, WHILE THE UNITED STATES DOLLAR IS OF LIMITED APPEAL TO THE COUNTRY, THE DEMAND FOR THE RAND-DENOMINATED CURRENCY IS LOWER. KATZ WARNED THAT IT WAS NOT YET POSSIBLE TO REACH A CLEAR CONCLUSION AS TO WHETHER THE FUTURE MODEL WOULD BE SUSTAINABLE。