The US Dollar Could Fall Out of Favor If It Doesn't Go Digital, ING Economist Says

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As multiple countries and entities weigh the validity of a central bank digital currency the physical United States dollar still sits in a place of dominance - but for how long?

"The dollar is the dominant currency today," ING economist Carlo Cocuzzo said on a panel at London Blockchain Week.

Cocuzzo added that "90% of forex turnover is in dollars, so the U.S. stands to lose in this game."

Countries and companies look to CBDCs with interest.

Over the past year, various entities and governments have expressed interest in digital currency issuances.

Facebook threw its hat into the ring in June 2019 with the release of a white paper for Libra, stablecoin to be backed by several currencies and financial products.

Cocuzzo sees potential complications ahead. Libra in particular has been the subject of numerous concerns from governing bodies since Facebook released its plans.

"That's an angle where things can get tricky from a dollar perspective," Cocuzzo said, referring to Facebook's mention of remittances in relation to Libra.

Cocuzzo also questioned a scenario in which citizens could use non-local currencies as payment.

"How would that affect the dollar in the Forex market? There will definitely be an impact and I don't think the U.S. central bank will wait and see."

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