• President Vladimir Putin of Russia has predicted a further decline for the US Dollar. 
• There are permutations that Bitcoin can also replace the Dollar in the near term.

The United States Dollar has been under threat lately with many nations trying to reduce their dependence on the currency. 

For as long as one can remember, the dollar has been the world’s reserve currency until now when its dominance is being questioned by blocs like the BRICS Group. The BRICS is a pack of five emerging economies Brazil, Russia, India, China, and South Africa. Their sole focus is to address the potential risk of the dollar hegemony and come up with a more suitable alternative.

Currently, the BRICS member states are working on proposing alternatives to the dollar for global trades and it looks like Bitcoin (BTC) may be top on that list. There is also the option of a gold-backed currency and the author of “Rich Dad, Poor Dad” Robert Kiyosaki is confident that BRICS could use gold as a weapon to weaken the U.S. Dollar. Former U.S. president Donald Trump already believes that the BRICS Group’s aggressive agenda for de-dollarization could be a massive threat. 

Already, some member countries of the bloc have begun to conduct international trade using their local currencies. China has been paying for commodities imported from Russia with its Chinese Yuan, a clear message that the threat is real

Russia president Vladimir Putin reiterated that the dollar is gradually losing its global role in an “objective and irreversible” process. After virtually attending the BRICS Summit 2023 which was held in Johannesburg, Putin acknowledges that the bloc has been making progress in reducing the dollar dominance. Markedly, the share of the U.S. Dollar in international trade declined by about 28.7%, as confirmed by the Russian President. 

Generally, digital asset payments have gained remarkable traction with many nations seeking to boost their economy and join the digitization trend all over the world. Some governments and central banks have turned to implementing their Central Bank Digital Currency (CBDC), although not many have recorded success in this area. Others have adopted protocols like Ripple’s XRP to facilitate cross-border settlements.

Bitcoin as an Alternative to U.S. Dollar

The use of Bitcoin (BTC) is still under consideration especially as there seem to be tough regulatory concerns around the token and other crypto. 

Cryptocurrency exchanges are being challenged by regulators like the Securities and Exchange Commission (SEC) and their activities are cracked down. Just as stated by American cryptocurrency exchange and publicly traded company Coinbase, U.S. regulators have failed to provide clear regulatory mandates for the nascent industry.

The failure of these regulators to implement a robust regulatory framework may be tied to a fear of de-dollarization.

At the same time, the sudden interest of top institutional investors like BlackRock, Fidelity, and others in Bitcoin, has given the leading token more exposure. These asset management firms are exploring the option of offering BTC-based products like the spot Bitcoin Exchange Traded Fund (ETF), the success of which will make Bitcoin a more appreciable asset class.