Can Bitcoin Challenge the Global Status of the US Dollar? Asset Tokenization May Become the Fast Track of Future Finance

On March 31, the CEO of one of the world's top asset management companies issued a 27-page annual letter to investors. In this letter, he rarely warned that if the United States cannot control its expanding debt and fiscal deficits, the dollar's status as the "global reserve currency" for decades may ultimately be replaced by emerging digital assets like Bitcoin.

Bitcoin May Undermine the Dollar's Reserve Currency Status

The CEO raised a thought-provoking question on page 20 of the report: "Will Bitcoin undermine the dollar's status as the world's reserve currency?"

He pointed out that the United States has long benefited from the position of the dollar as the global reserve currency, but this advantage is not permanent. Since 1989, the growth rate of U.S. national debt has been three times that of GDP. This year, interest expenses alone will exceed $952 billion, surpassing defense spending. By 2030, mandatory government spending and debt service will consume all federal revenue, leading to a long-term deficit.

While warning about the risks of traditional finance, the CEO also made it clear that he does not oppose the development of digital assets. He wrote: "It needs to be stated that I clearly do not oppose digital assets. But two things can be true at the same time: Decentralized finance is an extraordinary innovation that makes the market faster, cheaper, and more transparent. However, this very innovation could also undermine the economic advantages of the United States—if investors start to believe that Bitcoin is safer than the US dollar."

Reviewing performance, he pointed out that the company's Bitcoin ETF launched in the United States has become the largest exchange-traded product debut in history, with assets under management exceeding $50 billion in less than a year. This is the third-ranked product in terms of asset attractiveness in the entire ETF industry, second only to the S&P 500 index fund. Among this, over half of the demand comes from retail investors, with three-quarters coming from investors who have never held the company's products before. This year, the company has expanded its Bitcoin products to exchange-traded products (ETPs) in Canada and Europe.

He further pointed out that ETFs have not only achieved great success in the United States but are also becoming a key tool in promoting the development of investment culture in Europe. Currently, only one-third of individual investors in Europe participate in capital market investments, a proportion that is significantly lower than the over 60% in the United States. To improve this ratio, the company is collaborating with several established institutions and emerging platforms in Europe to jointly lower investment barriers and enhance local financial literacy.

Optimistic about RWA, believing that tokenization is the "highway" to the future of finance.

From ETFs to the currently popular cryptocurrency technology, this CEO believes that tokenization is becoming a key force in reshaping financial infrastructure.

He wrote that the circulation of global funds today still relies on the "financial pipeline" established in an era when trading floors depended on voice orders and fax machines were considered revolutionary tools. Take the Society for Worldwide Interbank Financial Telecommunication (SWIFT) as an example – it supports trillions of dollars in global transactions every day, and its operation resembles a relay race: banks pass on instructions in sequence, with each step carefully verifying the details. In the 1970s, when market size was smaller and trading frequency was lower, this relay method made sense. But today, continuing to rely on SWIFT is as inefficient as sending emails to the post office for forwarding.

In his view, the emergence of tokenization will completely change this inefficiency. If SWIFT is the postal service, then tokenization is the email itself—assets can flow directly and in real-time, bypassing all intermediaries.

He further illustrated how tokenization profoundly changes the financial ecosystem, undoubtedly showing optimism for the RWA market. "It is the conversion of real-world assets (such as stocks, bonds, real estate) into digital tokens that can be traded online. Each token represents your ownership of a specific asset, much like a digital proof of ownership. Unlike traditional paper certificates, these tokens securely exist on the blockchain, making buying, selling, and transferring instantaneous, without cumbersome paperwork and waiting times. Every single stock, every bond, every fund—every type of asset can be tokenized. Once realized, it will completely revolutionize the way investments are made. The market will no longer need to close, and transactions that previously took days to complete can settle in seconds. The hundreds of billions of dollars currently frozen due to settlement delays will be able to be immediately reinjected into the economy, driving further growth."

He stated that perhaps most importantly, tokenization will make investing more "democratic". Tokenization enables the democratization of access. Tokenization allows for the fragmented ownership of assets—assets can be divided into countless small pieces. This means that assets which originally had high barriers to entry (such as private real estate, private equity) will be open to a broader pool of investors, greatly reducing the participation threshold.

Tokenization can also achieve the democratization of shareholder voting. Owning shares means you have the right to vote on shareholder proposals. Tokenization makes voting more convenient, as your ownership and voting rights are recorded digitally, allowing you to participate in voting securely and without barriers from anywhere.

Tokenization can also achieve the democratization of returns. Some investments offer returns that are much higher than others, but often only large investors can participate. One reason for this is the "frictions" that exist due to legal, operational, and bureaucratic issues. Tokenization can remove these barriers and allow more people to gain access to high-yield areas.

However, he also candidly pointed out that the widespread adoption of tokenization still faces a key technical and regulatory challenge. "One day in the future, I believe tokenized funds will become a daily allocation for investors just like ETFs—provided that we overcome a key issue: identity verification."

He stated that financial transactions require strict identity verification. Currently, mainstream payment and trading platforms can complete billions of identity verifications daily without obstruction. However, tokenized assets will no longer go through these traditional channels, so we need a whole new digital identity verification system.

"It sounds complicated, but the most populous country in the world—India, has achieved this goal. Today, over 90% of Indians can securely complete transaction verification through smartphones."

In this annual letter, he also reviewed the historical development of capital markets, pointing out their important role in promoting social prosperity and helping individuals accumulate wealth through investment. He mentioned that there is still a need to further promote financial innovation to bridge the gap between public and private markets, and emphasized the importance of expanding investment opportunities, especially to allow small and medium investors to participate in asset classes that were originally only accessible to the wealthiest individuals.

Although he also acknowledges the current widespread economic anxiety, he still tries to reassure investors, stating that such periods are not new—just like in historical cases, relying on human resilience and the strength of capital markets, the economy will eventually stabilize.

Overall, this annual letter to investors warns of the risks to the dollar's global reserve status and serves as a forecast for the future of finance. From tokenization reconstructing capital markets to the breakthroughs needed in digital identity systems, it reveals the irrationalities of the existing system and points to the new directions that technological and institutional innovation may bring.