ECB's Panetta Expects Gradual Shift Away from Dollar as Main Global Currency

Bloomberg reports that Fabio Panetta, a member of the European Central Bank's governing council, stated today that the international monetary system is likely to gradually move away from sole dependence on the US dollar as the primary global currency, expecting a shift towards a multipolar formation that includes several currencies operating together, according to a speech he delivered in Dublin on Tuesday. Panetta clarified that the dollar will maintain its primary position for now, but noted that the world may witness a transition towards greater diversification in the global monetary landscape, potentially leading to a multipolar structure. However, he warned that this shift could either enhance diversification or increase market volatility and spillover risks if coordination among stakeholders fails. Panetta stated directly, "This transition could lead to greater diversification or amplify volatility and spillover risks if coordination falters." This statement comes amid international discussions about the future of the global monetary system, reflecting the ECB's vision for potential changes in the structure of major currencies, emphasizing the need for international cooperation to avoid potential financial risks.