The introduction of a digital U.S. dollar could help democratize banking in poorer countries, but it would also pose a risk to local currencies if it were readily accessible, according to former Indian central bank governor Raghuram Rajan.

An easy-to-use electronic version of the greenback could spur people in lower-income nations to use the dollar for day-to-day transactions, something that’s difficult today thanks to the need for physical bills. That could effectively crowd out the local currency in countries where there’s low levels of confidence in macroeconomic policy, according to Rajan’s argument.

 

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2022 ALM Global, LLC. All Rights Reserved.