World Gov'ts Eye Blockchain as Dollar's Power Wanes, Says Ripple CEO

Cryptocurrency advocates have long been keen to point to the weaknesses of fiat currency.

Now an uncertain world rocked by a global health crisis and geopolitical flare-ups is bringing them into dialogue with the mainstream more than ever.

In a tweet thread published on Aug. 3, Ripple CEO Brad Garlinghouse engaged with a recent article in Bloomberg, which had surveyed the gamut of potential alternatives to the dollar as the world's reserve currency.

Garlinghouse said the momentum behind digital currencies on the cusp of the 2020s was a question of "Trust in the financial system at the end of the day."

"As global populations continue to lose confidence in fiat currencies, they will choose to diversify. Our future global financial system will do the same," he argued.

His argument held a line close to Fundstrat's Tom Lee, who had told Bloomberg that "Trust is really getting broken in the traditional financial system-that's the theme. The less trust you have in the dollar, the more you want alternatives."

The COVID-19 economic crisis began bullishly for the U.S. dollar, with investors fleeing to its "Refuge" early on - spurring an exceptional 9% rally.

Its recent dip reflects mounting diplomatic tensions between the U.S. and China and the uneasy settlement that the dollar's dominance represents in a tumultuous and multipolar world, thrown into sharp relief by the pandemic.

Analysts - as Garlinghouse notes - all agree that we're unlikely to see the immediate demise of dollar hegemony.

The dollar's position as the "Backbone" of global financial infrastructure "Isn't going to disappear in favor of gold/the yuan/crypto/any other asset any time soon," Garlinghouse wrote.