BlackRock CEO warns that the dollar's future is at risk and sees Bitcoin as a potential alternative

BlackRock CEO Larry Fink expressed concerns about the future of the US dollar as a global reserve currency.

In its annual letter to shareholders, Fink highlighted the challenges the U.S. faces in maintaining its strong position as the U.S. is struggling to cope with growing Treasury bonds. He pointed out that unless the U.S. government takes active measures to control the fiscal deficit, the dollar's global reserve currency status may face doubts and may even lead to markets seeking alternative currencies or denominators.

The U.S. debt has exceeded annual GDP, with interest expenditures expected to exceed $952 billion this year and may face a permanent deficit by 2030, when all federal revenue will be used to repay debts. This fiscal pressure could weaken the dollar's credit, especially in the context of rising inflation.

If this trend continues, institutions and investors may turn to lower risk and higher valued valuation units, potentially increasing demand for digital assets like Bitcoin, Fink believes.

Fink also highlights the potential of digital finance, especially tokenization, which will improve the transparency, efficiency and liquidity of the financial system. BlackRock has begun developing tokenized financial products, including a tokenized money market fund. Fink said the company is committed to engaging customers in tokenized stock and bond investments in the private market.

Despite BlackRock's continued investment in Bitcoin and launching the iShares Bitcoin Trust (IBIT), Fink also acknowledged the risks of digital assets and reiterated the urgency of the U.S. having to address its fiscal challenges. He believes that if the United States fails to effectively control the fiscal deficit, the dollar's credibility will be damaged, which may lead to an increase in market demand for neutral denomination units such as Bitcoin.

In the letter, Fink called for reform of the existing financial system and recommended the use of innovative technologies such as tokenization and blockchain to improve market efficiency. He also stressed the need to establish appropriate regulatory frameworks to ensure that these innovations can develop safely, transparently and responsibly.

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