The US dollar has retained its global supremacy ever since the Bretton Woods agreement in 1944, just like the British pound before that and the Spanish currency before that. The dollar has been an economic and political power of the United States. According to Phillippe Waechter, head of research at Ostrum Asset Management,
The dominant currency is always that of the world’s biggest political power.
The US dollar accounted for approximately 62% of global foreign exchange reserves in early 2019 alone, the EU’s single currency accounted for 20% and China’s yuan only 2% despite the country rising as the second-biggest economy after the United States.
When the US dollar appreciates, in effect so will repayments for emerging countries because their debts are denominated in dollars.
But the Bank of England governor Mark Carney expresses that,
In the long term, we need to change the game.
He also believes that the public sector, in the form of central banks, could provide the best support for a new digital currency. He continues,
It is an open question whether a new cryptocurrency would be best provided by the public sector, perhaps through a network of central bank digital currencies.
But world leaders remain anxious because these cryptocurrencies including Facebook’s Libra remain unregulated. For digital currencies like Libra to succeed, they must address these regulatory issues.
Mark Carney comments on the matter,
The Bank of England and other regulators have been clear that unlike in social media, for which standards and regulations are only now being developed after the technologies have been adopted by billions of users, the terms of engagement for any new systemic private payments system must be in force well in advance of any launch… While a digital currency might not yet be ready to replace the dollar as a global currency, the concept is intriguing.
Blockchain as we know it, is just the operating system of an entirely new economy and for the first time in history, it could render central banks and governments obsolete when it comes to money, but unless cryptocurrencies check their regulatory issues, the US dollar will continue to dominate as king.