Times: Dollar Funds and Insurance Policy

times: He said a new digital currency backed by a large group of nations would unlock dollar funds that governments currently hoard as an insurance policy in uncertain times, according to The Guardian. Governments stockpile dollars to insure against swings in the US economy, which in recent times have intensified, leading to a significant rise in the cost of borrowing. Likening the move to the end of sterling's command of international money markets 100 years ago, Carney said the dollar had reached a level of dominance that meant it was a barrier to a sustainable recovery. A digital currency could dampen the domineering influence of the US dollar on global trade Carney said in a speech at the gathering of central bankers from around the world in Jackson Hole, Wyoming. The dollar's influence on global financial conditions could similarly decline if a financial architecture developed around the new digital currency and it displaced the dollar's dominance in credit markets. If the share of trade invoiced in a digital currency were to rise, shocks in the US would have less potent spillovers through exchange rates, and trade would become less synchronised across countries. (news.financializer.com). As reported in the news.