The current global monetary system has come under a lot of pressure. Even before the coronavirus outbreak, things were not looking all that great. OKEx CEO Jay Hao is convinced now is the time to reconstruct the global monetary system as people know it today.

A Problematic Global Monetary System

There are many problems associated with the current global monetary system. Not only is it unbalanced on a good day, it appears that central banks tend to make the situation even worse when a crisis occurs. The global coronavirus pandemic has confirmed that the current system in place will not offer any real improvements in the near future.

In the United States, a worrisome decision was made by the Federal Reserve. Contrary to many people’s expectations, the bank reintroduced quantitative easing, or QE. Not only that, but the Fed confirmed it will go to extreme lengths to bring more liquidity to the markets. While this may seem like a positive approach, every decision has consequences.

Market panic continues to wreak havoc on a global scale. Stock prices remain incredibly volatile, whereas alternative assets seem to be appreciating in value. An uneasy situation on this scale is not sustainable for very long. The recently introduced QE measures are a short-term fix, but not a proper solution. A real countermeasure needs to be put in place. One way to address the problem is by revamping the global monetary system entirely.

The Vision of Jay Hao

OKEx CEO Jay Hao has an interesting vision on how the global monetary system can be “saved”. The first order of business is to remove the reliance on one traditional and bank-controlled sovereign currency. It is not the first time such a concept is proposed, as similar ideas floated around in the 1940s.

John Kaynard Keynes proposed a super-sovereign currency called Bancor, not to be confused with the cryptocurrency and blockchain project. While it was never implemented, the concept outlined over 7 decades ago is still valid today. 

One potential candidate for this super-sovereign currency is Bitcoin. It is the only global form of money in existence today, and one that doesn’t require middlemen. At the same time, the notorious price volatility of Bitcoin is not working in its favor.

Another solution comes in the form of stablecoins. Facebook’s Libra, while receiving ample criticism, still strikes a chord with many. It has the potential to become a currency spanning different continents, but turning it into a global form of money is not straightforward. There are still many questions waiting to be answered, both in terms of regulation and otherwise.