BlackRock: Bitcoin Can Reduce Dollar Dominance
The U.S. dollar could lose its role as the global reserve currency to Bitcoin or other digital assets if the country fails to manage its rising debt, according to BlackRock CEO Larry Fink.
In his Annual Chairman’s Letter to Investors, Fink emphasized that “decentralized finance is an extraordinary innovation” that enhances market efficiency by making them “faster, cheaper, and more transparent.”
However, he warned that “that same innovation could undermine America’s economic advantage if investors begin seeing Bitcoin as a safer bet than the dollar.”
According to data from Trading Economics, U.S. debt reached 122.3% of GDP in 2023—an increase from 105% in 2018.
While Moody’s Ratings still assigns the U.S. a AAA credit rating, its outlook has been downgraded to negative, signaling the potential for a future downgrade.
As of March 5, the U.S. Joint Economic Committee reported that the national debt stood at $36.2 trillion.
Over the past year, it has grown by $1.8 trillion—or about $4.9 billion per day—and has increased by $12.8 trillion over the past five years.
The Bipartisan Policy Center recently warned that the U.S. could face a potential default as early as July 2025.
Bitcoin is often viewed as a hedge by investors concerned about the risks tied to fiat currencies, including inflation.
Some market watchers believe the expiration of the debt ceiling suspension could trigger a Bitcoin price rally, while others, echoing Fink’s sentiment, suggest the rising national debt could further boost Bitcoin adoption.
In 2025, cryptocurrencies have gained significant recognition as an asset class, bolstered by adoption from both nation-states like the U.S. and major corporations such as Strategy.
However, some analysts argue that stablecoins could actually help reinforce the dominance of the U.S. dollar.
In his letter, Fink also noted that “tokenization is democratization,” describing it as a technological leap that allows for “instant buying, selling, and transferring without cumbersome paperwork or waiting periods.”
He wrote that if every asset were to become tokenized, “it will revolutionize investing. Markets wouldn’t need to close. Transactions that currently take days would clear in seconds. And billions of dollars currently immobilized by settlement delays could be reinvested immediately back into the economy, generating more growth.”
Tokenization, according to Fink, broadens access to markets, enhances shareholder voting, and increases yield opportunities.
Data from RWA.xyz shows the tokenized real-world asset (RWA) market is currently valued at $19.6 billion, with approximately 93,000 asset holders and 174 issuers.
Forecasts suggest the market could grow to between $4 trillion and $30 trillion by 2030.
BlackRock’s own BUIDL fund is currently the largest tokenized RWA fund in the market, followed by Tether Gold and Franklin Templeton’s BENJI fund.
Sources:
https://cointelegraph.com/news/bitcoin-dominance-dollar-blackrock-larry-fink
https://www.blackrock.com/corporate/literature/presentation/larry-fink-annual-chairmans-letter.pdf
https://tradingeconomics.com/united-states/government-debt-to-gdp
https://www.jec.senate.gov/public/vendor/_accounts/JEC-R/debt/Monthly%20Debt%20Update.html
https://thehill.com/business/budget/5210371-federal-government-debt-default/
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