BlackRock CEO – Popularity of Bitcoin Puts USD’s Reserve Currency Status in Jeopardy
Bitcoin’s rising reputation endangers the global reserve currency status of the US dollar, as per BlackRock CEO Larry Fink.
While giving a speech online to the members of a Council on Foreign Relations digital symposium, Fink disclosed that Bitcoin is closely monitored by his fund. The event was also presided by Mark Carney, the ex-governor of the Bank of England.
On the effect of Bitcoins rising popularity and the US dollar’s value, Fink stated:
“Having a digital currency has a real impact on the U.S dollar. The digital currency makes the need for the U.S dollar to be less relevant. And I’m not talking about America, I’m talking about international holders of dollar-based assets.”
The US dollar remains the world’s top reserve currency. As per IMF, the US dollar accounts for more than 60% of documented reserves of central banks across the globe. Almost 65% of greenback is utilized outside the US, supporting 80% of all trade funding transactions. Fink trusts Bitcoin’s emergence could put an end to the greenback’s superiority. He posed the following query:
“Does it [digital currency] change the need for the dollar as a reserve currency, if there was a true digital currency that was separated from dollar-based assets?”
— Andrewstotle (@Andrewstotle) December 2, 2020
Fink additional disclosed that BlackRock investors have created a huge intrusiveness about Bitcoin. Discussions and news about the cryptocurrency has attracted the maximum number of visitors on BlackRock’s website, far ahead of Covid-19 and monetary policy. Bitcoin had 600,000 hits, with Covid-19 and monetary guidelines each receiving only 3,000 hits.
“What that tells you is that Bitcoin has caught the attention and the imagination of many people,” he stated.
Fink being one of the popular fund managers hopes Bitcoin would grow into a world market. The 68-year old is the co-founder of BlackRock, the world’s biggest money management company. Having established the firm in 1988, he has turned it into a global behemoth, with nearly $7 trillion in assets under administration. He stated:
“Can [Bitcoin] evolve into a global market? Possibly. [Bitcoin is] still untested, a pretty small market relative to other markets. You see these big giant moves every day. It’s a thin market.”
Fink’s optimistic view has come few days after BlackRock’s top investment officer Rick Rieder said that ‘Bitcoin is here to stay.’
Rieder further stated that millennial are adopting digital payments, and also Bitcoin.
Wow. BlackRock CIO of Fixed Income Rick Rieder talking about Bitcoin replacing gold on CNBC this morning. pic.twitter.com/9KZR0muJVp
— Pomp 🌪 (@APompliano) November 20, 2020
Rieder refrained from giving his opinion on the valuation of Bitcoin. Nevertheless, he opined that Bitcoin will substitute gold as a reserve currency. He additionally stated that Bitcoin will be a “durable mechanism that is so much more functional than passing a bar of gold around.”