The fight for supremacy between the USD and Bitcoin may have commenced with the realization that the former could be used for punitive measure against rival countries.
Jim Rogers, the veteran investor says that cryptocurrency poses a threat to the dominance of the United States dollar. He said that this could lead to a ban of cryptocurrencies. In a warning he gave to investors, Rogers said that cryptocurrencies will likely dominate the USD, eventually leading to a ban.
Speaking during an interview with Financial Times India, he said that the USD can no longer be considered the safe haven that it once was, highlighting that countries are wary of the leverage that the United States government has over those that depend on the currency for reserve.
The use of the USD as a punitive measure in sanctions may make countries to seek other havens and cryptocurrencies come handy in such instances. An example is the recent sanctions against Russia at the onset of the invasion of Ukraine.
Rogers, who is the co-founder of Quantum Fund, said that the reason people outside the United States could hold the USD is as a safe haven. He maintained that when that purpose is threatened, that they would seek alternatives, which cryptocurrency is tending towards becoming.
According to him, with the recent happenings in Washington, people are increasingly aware that the USD is no longer a neutral safe haven that countries can rely upon when there are issues with the US or her allies.
A Biased Monetary System
He said that,
“Now if Washington does not like you, they put sanctions on you, and you cannot use US dollars. So many countries are starting to look for a competitor – China or Russia or India, Iran, Brazil…”
Rogers said that the future of digital currencies could be tumultuous since countries would increasingly use them as safe havens to escape the now biased US monetary system. He maintained that with the recent happenings, governments could move against the coin market through taxation and extreme regulatory activities to stifle it, due to its competitive stance against the traditional monetary system.
Unwillingness To Give Up Control
Even with the interest that governments have shown towards digital money backed by their central banks, Rogers said that the US wouldn’t want to give up the control it has over several countries through the dominance of the USD as a reserve currency.
“I do not like it but that is the way governments are, and I just suspect that they will either tax it or regulate it or outlaw it or something because they do not want to lose control. Governments do not want to lose control and therefore they are not going to let us do what we want.”