"The dollar's dominance over the past couple of decades has not been noticeably eroded by standard measures of an international currency's use:" Fed Governor

Notwithstanding the risks posed by China's economic expansion and the emergence of cryptocurrencies, the US dollar's standing as the global reserve currency is probably going to endure, a US Federal Reserve official stated on Thursday.

Fed Governor Christopher Waller made prepared remarks at a conference in the Bahamas, stating that the dollar is still the most popular currency for international transactions and is ranked first among notes held by overseas investors as a store of value.

"The dollar's dominance over the past couple of decades has not been noticeably eroded by standard measures of an international currency's use," he said to the gathering in Nassau, the country's capital. "Going forward, however, there are potential challenges to the dollar's international status, and some recent developments have the potential to boost the international use of other currencies," he said.

The emergence of cryptocurrencies, the euro's increasing stature as a global currency, China's initiatives to increase the renminbi's usage abroad, and the potential for Russian sanctions to split the world economy were among the threats mentioned by Waller.

However, Waller predicted that the dollar would probably remain at the top in each of these scenarios.

"Crypto-assets are de facto traded in US dollars," he said, since dollar-linked "stablecoins" are so widely used as a way to transfer funds between digital currencies.

Even though the euro is currently the second most widely used foreign currency globally, Waller added that it still cannot compare to the dollar. The renminbi is also hindered by the fact that it is not freely exchangeable and by the "relatively low" level of investor confidence in Chinese institutions.According to Waller, the expanding geoeconomic fragmentation of the global economy poses a challenge to the dollar, but it hasn't been able to lessen its attractiveness thus far.

"Despite the reallocation of trade flows across countries, at the end of the day, those trade flows continue to be invoiced mainly in dollars," he said.

"I do not expect to see the US dollar lose its status as the world's reserve currency anytime soon, nor even see a significant decline in its primacy in trade and finance," he added.

End//voice7news.tv