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FORMER IMF CHIEF ECONOMIST BELIEVES CRYPTO IS A RISING THREAT TO THE U.S. DOLLAR’S DOMINANCE
Kenneth Rogoff believes that “crypto has value” and its growing usage in the gray market can chip away at the dollar’s hegemony.
American economist Kenneth Rogoff believes that the rise of crypto poses a threat to the hegemony of the U.S. dollar.
Rogoff previously served as the chief economist at the International Monetary Fund (IMF) and on the Federal Reserve Board. He is a published author and an economics professor at Harvard University.
In an interview with Bloomberg, Rogoff said that while the U.S. dollar is still the most dominant global currency, its influence is decreasing.
“I see it [dollar’s dominance] as in decline — it’s fraying at the edges where, of course, the renminbi is breaking free of the dollar, the euro is going to have a larger footprint — that’s been going on for a decade.”
Crypto is already eating away at the U.S. Dollar’s dominance
Rogoff said that one of the main markets for the U.S. dollar is the underground economy, sometimes referred to as the gray market or the shadow economy. The largest chunk of this economy, which the government cannot easily trace, is made up of tax evaders. Transactions conducted by criminals are also part of this economy, albeit a small one, he said.
As per Rogoff’s estimate and a World Bank survey, the underground economy constitutes about 20% of the world economy. That makes it worth around $20-to-$25 trillion, depending on the value of the dollar.
Earlier, the preferred mode of payment for such transactions used to be U.S. dollar notes. But now, crypto is increasingly emerging as the new favorite. In his latest book, Our Dollar, Your Problem, Rogoff states that cryptocurrencies have already started chipping off at the dollar’s global standing. In his interview, he said:
“…although crypto has not made significant inroads into the legal economy, it is increasingly used in the global underground economy – consisting of criminal activity but mainly tax and regulatory evasion – where cash, especially US dollars, had been king.”
The dollar losing its footing to crypto impacts the larger global market by making everything more expensive through rising interest rates. From Treasury bill rates and mortgages to car and student loans, all interest rates are affected by the dollar’s declining influence. This is because the U.S. enjoys an “exorbitant privilege” from the dollar being the most important reserve currency, he explained.
Additionally, U.S. authorities track financial flows to gather information about potential threats to national security, and a loss in the dollar’s market share makes that more difficult.
Ironically, last year, Senator Cynthia Lumis said that having Bitcoin (BTC) in reserve can help the dollar “remain strong.”
‘Crypto has value,’ Rogoff says
According to Rogoff, critics who believe cryptocurrencies are just scams with no value are “completely wrong.” He said:
“The notion that there is no ‘fundamental value proposition’ in transactions use [of crypto] is just wrong.”
Rogoff explained that cryptocurrencies provide an accepted medium of exchange, which is a value proposition. Even if the government heavily regulates crypto, it will still face significant challenges controlling the underground economy, where it has less leverage, he said.
Therefore, Rogoff insists that “crypto has value.” The difficulty that authorities will face in tracking crypto transactions in the gray market is significant, which means crypto is “not worthless,” because “there’s a lot at stake here,” he added. However, he clarified:
“Crypto can’t replace the dollar. But that’s in the legal economy where the government has a lot of leverage. But in the underground economy, by definition, it has much less leverage.”
@ Newshounds News™
Source: CryptoSlate
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FED QUIETLY BUYS $43,600,000,000 IN US TREASURIES IN ALLEGED ‘STEALTH QE’ OPERATION AFTER CHINA ABRUPTLY DUMPS BILLIONS IN BONDS
The Federal Reserve just bought $43.6 billion in US Treasuries in the span of a single week, sparking concerns that a quiet quantitative easing (QE) operation is already underway.
New documents reveal that the Fed purchased $8.8 billion in 30-year bonds on May 8th via its System Open Market Account (SOMA) – a move that followed a much larger $34.8 billion purchase earlier that same week.
The series of large purchases has triggered allegations that a “stealth QE” program is unfolding. A recent MarketWatch op-ed by Charlie Garcia described the move as “monetary policy on tiptoes.”
The Fed has long maintained that such purchases are routine reinvestments of maturing securities, designed to help adjust the money supply and influence interest rates to meet monetary policy targets.
The Fed’s buying spree comes in the wake of a major sell-off from China
New numbers from the U.S. Treasury Department show that China sold $18.9 billion in U.S. bonds in March, even as most other countries increased their holdings during the same period.
Following the sell-off, China’s holdings now stand at $765.4 billion, placing the country in third place among foreign holders of U.S. debt.
The top two holders are now:
- Japan, with $1.13 trillion
- The United Kingdom, with $779 billion
China’s reduction in holdings has raised questions about geopolitical motives and economic strategy, while the Fed’s sudden bond purchases have fueled speculation of backdoor liquidity support for U.S. markets.
While the Federal Reserve continues to deny any formal return to quantitative easing, market analysts and commentators are beginning to raise red flags about the scale and timing of these recent purchases.
If these trends continue, the Fed may face increasing scrutiny over whether it is quietly attempting to stabilize markets and artificially suppress long-term interest rates in response to foreign divestment and rising fiscal pressure.
@ Newshounds News™
Source: DailyHodl
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RIPPLE HAILS CRYPTO ETF BOOM AS GAME-CHANGER FOR INSTITUTIONAL ACCESS
Ripple’s CEO breaks it down: crypto ETFs are revolutionizing access for institutional investors and delivering long-sought legitimacy, catapulting digital assets into mainstream financial dominance.
Ripple Unpacks Crypto ETF Surge—Access and Legitimacy Just Changed Everything
Ripple CEO Brad Garlinghouse took the spotlight on Friday in a special episode of Ripple’s “Crypto In One Minute” to address the surging momentum behind crypto exchange-traded funds (ETFs). His remarks focused on the question: “Why are crypto ETFs exciting?” Garlinghouse identified two central drivers behind the growing institutional enthusiasm for these financial products, highlighting both access and legitimacy as key developments transforming the digital asset landscape.
First, Garlinghouse emphasized that ETFs now offer traditional investors a new gateway into crypto markets, stating:
“This was really the first time you had institutions be able to go on Wall Street and trade directly in crypto.”
He explained that for years, institutional investors—ranging from mutual funds to pension funds—were largely sidelined due to the complexities of self-custody and hesitations around using centralized exchanges. With ETFs, capital that was previously locked out can now enter the market through familiar, regulated structures. This shift addresses long-standing access barriers that had limited crypto’s reach into mainstream finance.
Second, the Ripple CEO argued that the emergence of crypto ETFs is helping transform how the sector is perceived, stating:
“It really is institutionalizing the entire industry of crypto.”
Garlinghouse cited the rapid growth of bitcoin ETFs as evidence. This, he suggested, marks a growing acknowledgment of crypto as a serious and legitimate asset class, on par with traditional options like gold ETFs.
A Critical Moment for the Industry
Garlinghouse’s appearance comes at a pivotal time for the crypto industry, following the U.S. Securities and Exchange Commission (SEC)’s approval of bitcoin and ether ETFs, which many view as a gateway to more diverse crypto investment products.
A wave of new filings has recently emerged, including proposals for XRP ETFs, reflecting heightened interest from institutional investors. The growing momentum is further fueled by President Donald Trump’s increasingly pro-crypto stance, and the appointment of crypto-friendly officials, such as the current SEC chairman.
Ripple’s Legal Resolution Adds Momentum
Adding further optimism to the crypto market, the SEC has moved to dismiss its enforcement case against Ripple over XRP—though the court has yet to approve the settlement agreement. The prolonged legal battle had cast uncertainty over XRP’s regulatory status in the U.S.
The anticipated resolution of this case is seen as a step toward regulatory clarity, as Ripple and its supporters anticipate a more stable and transparent environment for digital assets going forward.
@ Newshounds News™
Source: Bitcoin.com
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