New Global Digital Currency Raising Concerns (Worthy News In-Depth)
By Stefan J. Bos, Chief International Correspondent Worthy News
WASHINGTON (Worthy News) – An authority linked to the International Monetary Fund, which oversees the world’s monetary system, has launched an international central bank digital currency (CBDC), despite criticism, it will lead to global government control.
The Digital Currency Monetary Authority (DCMA) confirmed it introduced the so-called Universal Monetary Unit (UMU), which will be symbolized by the character Ü.
The UMU launched during last week’s Spring Meetings 2023 of the International Monetary Fund and World Bank Group in Washington D.C. officials said.
It is among several CBDCs rolled out worldwide among mounting concerns about the stability of the current monetary system.
The UMU is “legally a money commodity, can transact in any legal tender settlement currency,” the Digital Currency Monetary Authority (DCMA) explained.
“It functions like a CBDC to enforce banking regulations and to protect the financial integrity of the international banking system,” the DCMA added in a statement seen by Worthy News.
The new CBDC confirmed over the weekend, followed the collapse of several banks in recent weeks and concerns that the U.S. dollar will lose its status as the world’s reserve currency, Worthy News monitored.
CROSS-BORDER PAYMENT
Tobias Adrian, Financial Counsellor at the International Monetary Fund, welcomed the UMU as current “Cross-border payments can be slow, expensive, and risky.”
He noted that in “today’s world of payments, counterparties in different jurisdictions rely on costly trusted relationships to offset the lack of a common settlement asset together with common rules and governance.”
But, he stressed, “Imagine if a multilateral platform existed that could improve cross-border payments—at the same time transforming foreign exchange transactions, risk sharing, and more generally, financial contracting.”
His enthusiasm is shared by Darrell Hubbard, the DCMA executive director and “chief architect” of UMU. “This vision expressed by [the International Monetary Fund] IMF is the exact solution the DCMA is delivering to central banks worldwide.”
But not everyone has welcomed these developments, warning that CDBCs such as the UMU could further speed up the end of the U.S. dollar and weaken the United States.
U.S. Assistant Treasury Secretary under President Donald J. Trump, Monica Crowley, said before the launch that introducing CDBCs” means the loss of your individual economic freedom.”
She stressed that “the government will have total access and control of everything you buy and sell. And the ability to turn it off [immediately].”
SEEKING DOLLAR ALTERNATIVES
Yet the CDBCs come when several nations and the global banking system are already seeking alternatives for the U.S. dollar as the world’s reserve currency.
China and other countries also appear to increase control over people’s financial lives, according to experts familiar with their thinking.
Five leading emerging economies, Brazil, Russia, India, China, and South Africa (BRICS), have already agreed to work on a new global currency.
And Saudi Arabia, the world’s largest petroleum exporter, is in talks with Beijing to use the yuan for global trade, Worthy News established.
With CDBCs bow being introduced and other currencies being considered, the U.S. dollar share in global foreign reserves has dramatically dropped.
The dollar’s share in those reserves fell from just over 70 percent in 2002 to less than 60 percent last year and is rapidly declining, according to IMF data.
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