BlackRock CEO Larry Fink warns that the growing US debt may endanger the dollar's status as the world's reserve currency, while decentralized finance and tokenization gain traction.
US Debt and Its Implications
According to Trading Economics, the US debt equaled 122.3% of the country's GDP in 2023, significantly higher than the 105% observed in 2018. Moody’s Ratings maintains its AAA credit rating for the US but has downgraded its outlook to negative. The US's Joint Economic Committee wrote that as of March 5, the country's gross national debt was $36.2 trillion, growing $1.8 trillion over the past year. The Bipartisan Policy Center warned that the US could default on its debt as early as July 2025.
Bitcoin: A New Reserve Currency?
Bitcoin is seen as a safe haven for investors looking to avoid the perils of fiat currency, including inflation. Some believe that the end of the debt ceiling suspension could trigger a Bitcoin price boom. Larry Fink highlights that decentralized finance could undermine America's economic advantage if investors start viewing Bitcoin as a safer bet than the dollar.
Revolution Through Tokenization
Fink states that 'tokenization is democratization,' enabling instant buying, selling, and transferring without cumbersome paperwork or delays. The tokenized real-world assets market could reach $4 trillion to $30 trillion by 2030. BlackRock's BUIDL real-world tokenized asset fund is the largest such fund, followed by Tether Gold and Franklin Templeton's BENJI.
As US debt grows, Bitcoin and asset tokenization gain momentum, potentially shifting the global economic power balance.
