MNI BRIEF: Monetary System Becoming More Multipolar -Panetta

The International Monetary System may gradually drift towards a more multipolar configuration due to China’s rise and Europe’s deeper integration, but whether it becomes becomes a source of resilience or fragility will depend on how well it is governed, Bank of Italy head Fabio Panetta said on Tuesday. 

Speaking in Dublin, Panetta said the foundations of the dollar’s dominance are gradually weakening even if there is currently no threat to its position, noting that the future roles of China and Europe in the IMS will hinge on policy choices whose ambition and timing remain uncertain.

Panetta sees cross border payments as the most critical part of the current monetary system and points the role that stablecoins might play in innovation technology. However, he sees tokens as a source of more international dollarisation in the current framework.