Some countries have strived to abandon the USD as the world’s reserve currency without success, but now there is an ongoing debate on the possibility of an alternative to the dollar from surprising quarters – cryptocurrencies.

According to a panel comprising Paulo Guedes, Brazil’s Economy Minister, Githa Gopinath, chief economist at the International Monetary Fund (IMF) and others during the interactive session of the World Economic Forum (WEF) at Davos, Switzerland, there is a rethinking of the dominance of the dollar. This paradigm shift was incentivized by the prospect of Libra, the proposed Facebook digital currency.

The discussion which centered on the global financing method focused on the reserve currency and the fact that it is getting challenged. This is mainly due to the possibility that a behemoth such as Facebook could consider rolling out a cryptocurrency.

Adam Tooze who is the host is the director of the European Institute at Columbia University. Other participant is the Portuguese finance minister,   Mario Centeno and Zhu Ning, a professor of finance at Tsinghua University.

Gopinath stated that despite the possibility that the blockchain technology would be a source of challenge to the USD as the reserve currency, the American dollar is still attractive due to the stability it provides. According to him:

“Why is it that the dollar has such dominance? It does because it is the currency that provides the best stability and safety. […] It makes complete sense to hold your value in dollars because if things go bad, it gains value.”

The Libra has been proposed to be a stable cryptocurrency backed by several fiat currencies but the project has encountered some regulatory barriers causing partners to lose confidence in it even as officials warn that such a digital currency would create potent challenge to the dollar as global reserve currency.