Benoît Cœuré: Digital challenges to the international monetary and financial system

Panel remarks by Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, at the Central Bank of Luxembourg-Toulouse School of Economics conference on "The Future of the International Monetary System", Luxembourg, 17 September 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

When the euro was created 20 years ago it was hailed as one of the most important turning points in the history of the international monetary system since the demise of the Bretton Woods system. Many observers saw the euro as a natural contender to rival the supremacy of the US dollar in the global monetary and financial system. After all, the euro area was (and remains) the world's largest trading bloc.

The remarkable rise of China in the global economy, its expanding role in international trade, and the inclusion of the renminbi in 2016 in the International Monetary Fund's Special Drawing Right (SDR) valuation basket, were widely heralded as yet another turning point for the international financial system.

Yet, the US dollar remains the dominant international currency. It has defied all attempts to rival its monopoly position, even going back to the 1980s, when hopes that Japan's emergence as global creditor would support the internationalisation of the yen were also disappointed.

The US dollar today accounts for around half of global foreign exchange transactions worth 6.6 trillion dollars per day. It is used to invoice nearly half of global foreign trade, a share far greater than that of the United States in the global economy. And it is now as widely used as a reference unit for exchange rate arrangements as it was during the Bretton Woods era. By some measures, it has taken on an even greater role.

Today, the discussion is about so-called "stablecoins" - crypto-assets with value-stabilising characteristics.