Cryptocurrency could be the solution to the contradictions called the Triffin dilemma facing the U.S. dollar. To this conclusion, an economist at the Federal reserve Bank of St. Louis, Missouri, USA.
Federal reserve Bank held a one-hour session of questions and answers on Twitter with the participation of economist and Vice President in the research division of the Bank David Andolfatto (David Andolfatto).
One of the users asked if digital currencies be the solution to the Triffin dilemma — the economic dilemma, which can not allow for more than 50 years. In the early 1960-ies the economist Robert Triffin found a contradiction arising in the case for all international payments, even for foreign currency reserves is used the currency of one particular state, that is, in the current environment, the U.S. dollar. Triffin found that to maintain the currency reserves of the Central banks of other countries need to get into the US budget has not been received in foreign currency. But in this situation, the credibility of the us dollar will be undermined, so it is necessary that the foreign currency the US budget was received.
“The Triffin dilemma is a double-edged sword in a situation when in the world there is a single reserve currency. If private crypto currency to replace the dollar in this role of a reserve currency, then the dilemma would be solved,” he answered the question, Andolfatto.
Then the economist asked whether he thinks that cryptocurrency really can eventually become a substitute for the dollar and whether the Federal reserve system of the United States to consider digital currency in the further revision of their monetary policies. On the second question, Andolfatto said that because cryptocurrencies are essentially private money, they do not fall into the range of issues dealt with by Central banks.
Regarding the first question, the economist is convinced that cryptocurrencies will not replace the dollar, because the one does not require establishment of decentralized consensus. In addition, the demand for the digital currency isn’t even close to demand, which is in Fiat currency.
Experts and stakeholders frequently talk about the future of cryptocurrencies, and their opinions vary greatly. So Robert Kiyosaki (Robert Kiyosaki), the author of the acclaimed book “Rich dad, poor dad” in the summer shared their thoughts about what the fate of the us dollar ambiguous because it in fact “is bogus,” and the digital currency in the future will definitely be able to replace it.
