The US dollar may face the risk of being overtaken as the world’s reserve currency by Bitcoin or other digital currencies unless the nation effectively manages its debt, cautioned the CEO of a major investment management firm.
In his Annual Letter to Investors, he remarked that “decentralized finance is a remarkable innovation” that enhances the speed, cost-effectiveness, and transparency of markets. However, he warned that “this very innovation could jeopardize America’s economic edge if investors start to view Bitcoin as a more secure option than the dollar.”
Data from Trading Economics indicates that in 2023, the US debt constituted 122.3% of the country’s GDP, a significant increase compared to 105% in 2018. Moody’s Ratings continues to hold the US in the AAA category but has lowered its outlook to negative, suggesting a potential downgrade on the horizon.
The US Joint Economic Committee reported that as of March 5, the national debt had reached $36.2 trillion, increasing by $1.8 trillion over the past year—equating to around $4.9 billion per day—and $12.8 trillion over the last five years. This month, the Bipartisan Policy Center warned that the US might default on its obligations as soon as July 2025.
Often viewed as a refuge for those looking to escape the risks associated with fiat currencies, particularly inflation, Bitcoin (BTC) may see increased interest should the suspension of the debt ceiling come to an end. Some speculate that the looming challenges relating to national debt could further propel adoption of Bitcoin, in line with the CEO’s assertions.
In 2025, cryptocurrencies have emerged as significant assets, thanks to their acceptance by nations like the US and firms such as Strategy. Nonetheless, there are opinions suggesting that stablecoins could bolster the dominance of the US dollar rather than diminish it.
The CEO argues that “tokenization amounts to democratization,” with technological advancements enabling instantaneous buying, selling, and transferring of assets without the need for complicated documentation or lengthy waiting times.
If assets are fully tokenized, he suggested, “it will transform investing completely. Markets wouldn’t need to close, transactions that currently require days could be completed in seconds, and billions of dollars currently tied up in settlement delays could be quickly reinvested back into the economy, promoting further growth.”
He emphasized that tokenization enhances access, shareholder participation, and yield. According to data from RWA.xyz, the market for tokenized real-world assets is valued at $19.6 billion, with approximately 93,000 asset holders and 174 issuers. Industry forecasts predict that this market could expand to between $4 trillion and $30 trillion by 2030.
The firm’s own fund dedicated to real-world tokenized assets is currently the largest of its kind available for trading, followed by offerings from Tether Gold and the Franklin Templeton BENJI funds in second and third places, respectively.