Digital currencies have gained prominence over the last few years, although such options will not budge the U.Due south. dollar from its seat of prominence, according to primary economist International Monetary Fund (Imf) Gita Gopinath.

"Improvements in payment technology may accept lowered the cost of switching from cash to digital payments, but at that place is little evidence they take done much to reduce the expense of moving among currencies," Gopinath said in an stance piece for the Financial Times on Jan. 6, adding:

"Widely-held perceptions of the dollar's safety and stability accept kept it dominant in the international monetary system for decades."

Regulation and adoption of digital currencies

In June 2022, Facebook released a whitepaper for its Libra currency, a digital nugget backed by a bundle of fiscal assets and currencies. The projection has since been met with significant regulatory backfire.

Additionally, countries such equally China have stepped into the band, looking to release their own national digital currencies.

"While these are intriguing possibilities, they are improbable in the near-term," Gopinath wrote.

Resilience of USD

In terms of rationale, Gopinath mentioned the U.S. dollar's prominence in trade and banking across the globe, and to an always-growing increment in USD usage — a domino upshot of sorts.

The economist compared digital currencies to the Euro, which has not been able to overtake USD, noting the vast number of aspects contributing to the success and dominance of a national currency.

Gopinath also pointed toward institutions and investor safeguards held within the U.S. dollar, increasing its strength.

In short, Gopinath made it clear throughout her commodity that far too many complicating factors currently stand in the way of a digital currency looking to replace the U.Southward. dollar.

These waters may presently be tested equally IBM predicts a central bank digital currency coming within five years, co-ordinate to a Cointelegraph written report.

Cointelegraph reached out to Gopinath simply received no response equally of press time. This article volition be updated appropriately upon receipt of a response.