- Russian President Vladimir Putin has predicted a further decline in the US dollar.
- There are possibilities that Bitcoin can also replace the dollar in the short term.
The US dollar has been under threat lately as many countries seek to reduce their reliance on the currency.
For as long as one can remember, the dollar was the world’s reserve currency until its dominance was challenged by blocs like the BRICS group. The BRICS countries are an amalgamation of the five emerging economies of Brazil, Russia, India, China and South Africa. Their sole focus is to address the potential risk of dollar hegemony and find a more suitable alternative.
The BRICS member states are currently working on drafting a proposal alternatives to the dollar for global trading and it looks like Bitcoin (BTC) could be at the top of that list. There is also the possibility of a gold-backed currency, and Rich Dad, Poor Dad author Robert Kiyosaki is confident that the BRICS countries could use gold as their currency weapon weaken the US dollar. Former US President Donald Trump already believes that the BRICS group’s aggressive de-dollarization agenda could pose a massive threat.
Some member countries of the bloc have already started to do so Behavior international trade with their local currencies. China has paid for goods imported from Russia with its Chinese yuan, a clear signal that the threat is real
Russian President Vladimir Putin repeated that the dollar is gradually losing its global role in an “objective and irreversible” process. After the virtual participation in the BRICS Summit 2023 At the Johannesburg conference, Putin acknowledged that the bloc had made progress in reducing dollar dominance. The share of the US dollar in international trade fell significantly by around 28.7%, as confirmed by the Russian President.
In general, payments with digital assets have gained remarkable traction as many countries try to boost their economies and join the digitization trend around the world. Some governments and central banks have turned to launching their central bank digital currency (CBDC), although not many have seen success in this area. Others have adopted protocols like Ripple’s XRP to facilitate cross-border settlements.
Bitcoin as an alternative to the US dollar
The use of Bitcoin (BTC) is still being considered, especially as there seem to be significant regulatory concerns surrounding the token and other cryptocurrencies.
Cryptocurrency exchanges are being challenged by regulators like the Securities and Exchange Commission (SEC) and their activities are being suppressed. As explained by the American cryptocurrency exchange and the listed company Coinbase, US regulators have failed to issue clear regulatory mandates for the burgeoning industry.
The failure of these regulators to implement a robust regulatory framework could be related to fears of de-dollarization.
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At the same time the sudden interest by leading institutional investors like BlackRock, Fidelity and others in Bitcoin has brought more attention to the leading token. These asset management firms are exploring the possibility of offering BTC-based products like the spot Bitcoin Exchange Traded Fund (ETF), the success of which will make Bitcoin a more valuable asset class.
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