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Central banks need to shepherd digital currencies: BIS director

Private sector alternatives would lead to walled gardens, Benoit Coeure says

Benoit Coeure says China's currency moves could one day threaten the U.S. dollar's dominance, but not as long as Beijing prioritizes internal security over financial openness. (Photo courtesy of BIS)

BERLIN -- Fifty years after the historic decision to suspend the dollar's convertibility to gold, unilaterally changing the global monetary system, digital currencies are about to revolutionize global finance all over again. Benoit Coeure, director of the Innovation Hub at the Bank for International Settlements (BIS), said in an online interview with Nikkei that the involvement of central banks in the digital economy will be essential because of the risk of disruption if digital payments are left to the private sector alone. "Central bank money," Coeure said, "has to be at the core of the system."

Coeure, who is leading a BIS study of central bank digital currencies (CBDCs), also believes the dollar will not lose its dominance in the near future, despite the rise of virtual currencies.

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