Former Chief Economist of the IMF: The rise of Crypto Assets in the global underground economy is eroding the dominance of the US dollar.

Kenneth Rogoff, former chief economist of the International Monetary Fund, warned that the rise of cryptocurrencies in the global underground economy is eroding the dominance of the US dollar, posing a dual economic and national security challenge to the United States. (Synopsis: Bitwise predicts that the "four major US brokers" will open bitcoin ETFs at the end of the year, and the real bull market of national speculation is coming? (Background supplement: Bitcoin futures open interest "broke a new high of $80 billion" on-chain data takes you to see, is the market overheated? Kenneth Rogoff, former chief economist of the International Monetary Fund (IMF), argues in his new book, Our Dollar, Your Problem, that the dollar's dominance in the global underground financial system is being infiltrated by cryptocurrencies. Rogoff sees the underground economy as "one of the most important markets for the dollar" and bluntly states that the dollar's global stature is declining and the edge is shaking. The Underground Economy: The Invisible Battlefield for Cryptocurrencies In an interview with Bloomberg, Rogoff pointed out that although the dollar has enjoyed "excessive privileges" since World War II, this status is being eroded by many parties, such as the growing influence of the renminbi and the euro and the intensification of geopolitics. In this context, cryptocurrencies are playing an increasingly important role, especially in the global underground economy, which is critical to the liquidity of the US dollar. The Outline of the Underground Economy and the Value Proposition of Cryptocurrencies By "underground economy," Rogoff refers primarily to tax evasion (which averages 15-20% in advanced economies and up to one-third of GDP in developing economies) and illegal economic activities such as arms and human trafficking. According to Rogoff research and World Bank literature, it accounts for about 20% of global GDP, amounting to $20 to $25 trillion, and the US dollar was once the main medium. But today, cryptocurrencies such as Bitcoin (Bitcoin) have significantly penetrated for trading and circumventing sanctions. Double warning to the United States: economic pressure and national security challenges Rogoff analyzed that the expansion of cryptocurrencies in the underground economy has caused a double impact on the economy and national security of the United States. Economically, the demand for dollars in the underground economy has declined, and Rogoff believes that this move may push up interest rates in the United States, affect the cost of treasury bonds, housing loans, car loans and student loans, and increase the burden on people's livelihood. On national security, the nature of cryptocurrencies makes it difficult for regulators to track illicit funds, fight crime, and enforce sanctions. According to the report, between 2022 and 2023, stablecoins were used to process more than $40 billion in illegal transactions to circumvent sanctions. Although the FBI and CIA have been tracked with blockchain analysis, they also reflect that the monopoly position of US dollar financial monitoring is being weakened. In addition, dissatisfaction with excessive US control of the financial system in parts of the world has exacerbated the challenge, prompting the shift of assets from the dollar market to other trading instruments. Consensus on the Value of Cryptocurrencies At the same time, Rogoff also refuted some people's claims that cryptocurrencies lack fundamental value: If the underground economy accounts for 20% of global GDP, then cryptocurrencies will become a $20~25 trillion economy. If you offer a means of exchange, that's a value proposition. Encryption has value. It is used for trading. Even if cryptocurrencies are heavily regulated, it is difficult for governments to control a large part of the economy. So it's not worthless. Related stories Trump: The United States is the leader in Bitcoin, and he brought good news at the TRUMP Meme Dinner Party? Bitwise predicts that the "four major US brokers" will open bitcoin ETFs at the end of the year, and the real bull market of national speculation is coming? "Former Chief Economist of the IMF: The rise of cryptocurrencies in the global underground economy is eroding the hegemony of the US dollar" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".