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In 2009, bitcoin, the world’s first decentralized digital currency was created. Designed to replace the U.S. dollar, the global reserve currency, bitcoin has become a sort of Rorschach test for humanity.
Some have compared it to rat poison; meanwhile, other people, like Eric Adams, the crypto-friendly mayor of New York City, are firm believers. Similarly, Jack Dorsey, the founder of Twitter, considers bitcoin a form of digital gold. Dorsey is such a firm believer in bitcoin’s potential, and he thinks it’s only a matter of time before the world’s most popular cryptocurrency replaces the U.S. dollar.
He’s wrong. It won’t.
Bitcoin is inherently volatile. Its value fluctuates wildly. Moreover, until everyday people living in relatively stable countries can use the “currency” to buy everyday items, Bitcoin will remain more of a plaything for the millionaires and billionaires of the world.
Right now, bitcoin is little more than a speculative asset, a gamble, a very risky bet. Nevertheless, in the not-so-distant future, the U.S. dollar could find itself usurped—not by bitcoin, but by China’s digital yuan (or RMB).
In a recent interview with CNBC, Richard Turrin, author of “Cashless: China’s Digital Currency Revolution,” discussed China’s digital yuan. Over the coming years, according to Turrin, the digital yuan “will directly challenge the US dollar’s domination of international trade settlements in the next decade.”
Turrin encouraged viewers to remember that China, the most populous country globally, also happens to be “the largest trading country” in the world. He said we will slowly but surely witness the digital yuan “supplant the dollar.”
By 2032, at the very latest, the digital yuan will likely have played a “significant role in reducing the dollar’s usage in international trade,” said Turrin, a former banker who once spearheaded IBM’s fintech team.
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