A renowned global strategist for the Morgan Stanley Investment Company, Ruchir Sharma, recently stood his ground and declared that bitcoin is headed towards replacing the dollar as the custom reserve currency.
Having published his opinion on the Financial Times on Wednesday last week, Ruchir warns the government against a false sense of security in believing that their systems are the only stores of value that people will ever trust.
The Indian strategist began his prediction by noting that the US dollar has been the world’s reserve currency for 100 years now. In his report, Ruchir was convinced that this is the case because strong contenders suchas the Euro or the China renminbi have failed to pass the cut-out for a worthy successor.
The covid-19 pandemic set the stage for the US government to wallow in their confidence. The government would print limitless quantities of the dollar without undermining their position as the world currency reserves and run large deficits without any dire consequences
Ruchir warns against this. He is confident the cryptocurrencies, especially bitcoin, will replace the dollar as a new decentralized and democratic alternative.
Last year, the amount of money the United States owed the rest of the world was equivalent to 50% of its economic output. This percentage rose to 67% after the country continued to borrow during the peak of the corona-induced lockdowns. This is a clear signal for a crisis.
Cryptocurrencies to the Rescue
The US dollar currency reserve state will likely end once the world begins to doubt its ability to pay its own bills.
Bitcoin has over the years grown stably and has gained active participation from major corporations and wealthy folks globally. Inasmuch as the cryptocurrency is only used majorly for investment purposes today, small sections of the world are using it for trading. Among the counties mentioned for actualizing bitcoin trade are Nigeria( the dollar is hard to come by) and Argentina( local currency is unstable).
Paypal and Venmo are among the leading trading companies that have supported bitcoins efforts to be a trading currency. The companies are planning to allow its 28 million merchants to start accepting bitcoin payments as of next year.