BlackRock chairman Larry Fink has mentioned that the US dollar could be replaced by bitcoin as a reserve currency. In his latest investors’ letter for 2025, Fink mentioned that the rising US debt could cause the currency to lose its top spot as a reserve currency.
Fink, who discussed many issues in the letter, said the US has greatly benefited from the dollar’s status over the past decades. However, he added that it may not be the case forever because of the rising national debt. The United States’ debt currently stands at $36.2 trillion, with interest payments hitting $952 billion this year. “By 2030, mandatory government spending and debt service will consume all federal revenue, creating a permanent deficit. If the US doesn’t get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like bitcoin,” Fink said.
Fink argued that calling out this development doesn’t mean he’s anti-digital assets, praising the decentralized finance and blockchain technology sectors and their advantages. However, he believes that if that happens, the advantage that the US holds will be greatly undermined, especially if countries continue to flock to Bitcoin as a safe bet. “Yet that same innovation could undermine America’s economic advantage if investors begin seeing bitcoin as a safer bet than the dollar,” he said.
BlackRock chairman promotes tokenization
Meanwhile, in his letter, the BlackRock CEO also mentioned tokenization, which he believes could be the next step in the financial market. In the letter, he compared tokenization and the current SWIFT technology adopted by financial institutions, noting that it is like email to the postal service. “If SWIFT is the postal service, tokenization is email itself — assets move directly and instantly, sidestepping intermediaries,” he said.
The BlackRock chairman further highlighted the advantages of tokenization, noting that it democratizes access, yield, and shareholder voting. In his opinion, the remaining aspect is that tokenized access sees full adoption in blockchain-based digital solutions. “The takeaway is clear. If we’re serious about building an efficient and accessible financial system, championing tokenization alone won’t suffice. We must solve digital verification, too,” he said.
His bullish stance on tokenization and crypto sentiments are not surprising, seeing the exploits that his company has achieved in the crypto industry by introducing traditional investors to the sector. The company’s spot Bitcoin exchange-traded fund (IBIT) is currently the biggest ETF with about $50 billion AUM. The firm is also a leader in the tokenization sector. Its BUIDL is a tokenized US treasury product in partnership with Securitize. It already has around $1.5 billion in market cap and keeps growing.