- Bitcoin is already held by several countries including the United States, El Salvador, and the Central African Republic.
- Some Countries are looking to fully adopt Bitcoin as a global reserve currency due to the low liquidity depth.
The adoption of Bitcoin (BTC) by two countries on different continents, El Salvador and the Central African Republic, has significantly shifted the dynamics of the United States dollar as a global reserve currency. While the United States dollar controls more than 55 percent of global FX markets through the SWIFT platform, other countries led by Russia, China, and India are looking to break away from the dollar.
In what has been described as de-dollarization, more countries are beginning to use their local currency in settling international trade.
Furthermore, the United States Fed has been struggling to bring inflation down to the desired 2 percent due to the banking crisis. Additionally, the Fed has printed more dollars in the past three years than in the past few decades in the name of stimulus packages to aid Covid-19 struck businesses.
Economists Forecast the Demise of the U.S Dollar
According to Matthew Piepenburg, a partner at German-based Matterhorn Asset Management, in a recent YouTube interview with Deutsche Goldmesse, the rise of Gold and real money – insinuating deflationary digital money like Bitcoin – has accelerated the demise of the United States dollar.
Furthermore, the United States Fed has been talking about raising its national debt ceiling amid rising inflation, thus adding to the burden of other countries holding the dollar as a reserve currency. Piepenburg stated;
So when that dollar gets higher because Powell is raising the rates, that becomes more onerous and painful for the rest of the world and they begin to break ranks. Asia in general, China and Russia in particular are very big rank-breaking nations. And, of course, they’re bringing 41 other countries alongside to have trade settlements outside the US dollar,
As a result, the economists unanimously agreed that the breakaway of global countries from the United States dollar is irrevocable. Currently, Russia and China are leading other top global economies including Brazil, India, and South Africa in developing a breakaway currency.
Moreover, China has significantly increased its international trade through its Yuan amid its rollout of the digital Yuan CBDC program.
The clear trend of breaking ranks with the US dollar as a trusted, reliable, dependable trade currency and payment system is now I think irrevocable,
In a recent BRICS’ update, nearly 19 more countries requested to join the organization that takes pride in a combined GDP of more than $26 trillion.
Bitcoin To the World
The Bitcoin market has been touted as real money with deflationary status amid mainstream adoption. Moreover, Bitcoin has been closely associated with Gold in its store of value characteristics. With a fixed supply of 21 million units, countries are beginning to adopt digital assets as a global reserve currency. Already, the United States government holds more than 220K Bitcoins seized from illicit activities.
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Additionally, the Russian government has adopted Bitcoin and other cryptocurrencies for settling crude oil trades amid increased sanctions from the West.
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