Forbes: Bitcoin Could Fix Dollar Triffin's Dilemma, Become Global Neutral Reserve Asset

BlockBeats News, August 20th, Forbes reported that U.S. Vice President JD Vance's previous remarks on the global reserve status of the U.S. dollar have sparked a debate on the long-standing contradiction of the dollar system. The article argues that while the U.S. dollar as the global reserve currency brings financing advantages, it also creates the "Triffin Dilemma": a national currency cannot simultaneously meet the domestic economic needs and the global reserve needs.

The article points out that the U.S. dollar's reserve status has driven global capital into the United States, boosting the value of the dollar, allowing U.S. consumers to obtain cheap imported goods, but at the same time weakening the competitiveness of U.S. manufacturing and exacerbating the trade deficit.

The author believes that after the end of the gold standard in 1971, the dollar system has continued to operate through U.S. debt and the global dollar market, but the core contradiction has not disappeared. Although stablecoins can expand the use of the dollar, they still rely on U.S. government debt behind them, which cannot fully address the problem of reserve assets depending on a single country's liabilities.

The article states that while gold has non-sovereign attributes, it has limitations in terms of transportation, verification, and settlement efficiency. Bitcoin, on the other hand, has characteristics such as fixed supply, no need for a country's credit endorsement, global verifiability, and fast digital settlement, making it a potential new neutral reserve asset.

The author suggests that in the future, the dollar can continue to serve as the global trade and commercial currency, while Bitcoin may gradually take on more of a reserve asset role, thereby easing the global monetary system's reliance on a single country's debt.

However, the article also points out that Bitcoin still faces issues such as price volatility, limited institutional adoption, and immature custody systems. Gold has a financial history of hundreds of years, while Bitcoin has only been around for 17 years, so whether it can become a global reserve asset still requires time for validation.