MNI BRIEF: Global Coordination Faces Gaps -- Former PBOC Chief

Global monetary policy coordination faces institutional and operational gaps, former People’s Bank of China governor Zhou Xiaochuan, told the Lujiazui Forum in Shanghai  on Wednesday.

No dedicated organisation oversees global macroeconomic coordination, and, while discussions reveal some agreement within the IMF, the United States’ veto power obstructs substantive consensus, Zhou said, adding that Special Drawing Rights remain a bookkeeping instrument whose applicability remains severely limited. 

The rise of dollar-denominated stablecoins could significantly enhance transaction and remittance efficiency and facilitate access to diverse assets, including digital and crypto-assets, potentially increasing market liquidity, but they risk accelerating de facto dollarisation which has introduced substantial negative side effects throughout history, he said. (See MNI: Beijing Pushes Yuan's Global Role As U.S Dollar Falters)