BlackRock states that Bitcoin has the potential to lessen the dominance of the US dollar

BlackRock CEO Larry Fink warned that the US dollar’s status as the world’s reserve currency could be replaced by Bitcoin or other digital assets if the US does not address its debt issues.

In his Annual Chairman’s Letter, Fink praised decentralized finance for making markets faster, cheaper, and more transparent. However, he cautioned that if investors start viewing Bitcoin as a safer option than the dollar, it could undermine America’s economic advantage.

As of 2023, the US debt was 122.3% of its GDP, significantly higher than the 105% recorded in 2018. Moody’s Ratings has maintained the US’s AAA credit rating but has downgraded the outlook to negative, suggesting a potential future downgrade.

Various reports have highlighted the alarming rate at which the US debt is increasing, with warnings that a default could occur as early as July 2025. Bitcoin has emerged as a safe haven for investors worried about fiat currency risks like inflation, leading to increased adoption in light of the national debt concerns.

Fink believes tokenization is democratizing the investment landscape, enabling instant transactions without delays or paperwork. He envisions a revolution in investing if all assets become tokenized, leading to market innovations and increased economic growth.

The tokenized real-world assets market is currently valued at $19.6 billion, with projections indicating potential growth to $4 trillion to $30 trillion by 2030. BlackRock’s BUIDL real-world tokenized asset fund is the largest trading fund in this space, followed by funds like Tether Gold and Franklin Templeton’s BENJI funds.

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