Will De-Dollarization Strengthen Bitcoin's Position as a Neutral Global Asset.

[slapper]

It isnt regulation. It is not volatility in the sense that most people think. These are still valid but secondary problems. Bitcoin is a fixed supply in a world economy based on credit expansion. This is a fundamental incompatibility.

Trade requires huge liquidity on a day-to-day basis, all over the world. This whole machinery runs on the assumption that the monetary base can flex when needed. Bitcoin, in its structure, cannot do that. 21 million coins period. Very good for holders of self-custody, really very good. But it does not allow Bitcoin to serve as a reserve settlement currency like the dollar.

So what DOES Bitcoins actual purpose here? Perhaps what gold is now, but more portable and with proven scarcity. A reserve asset which a nation keeps on their balance sheet as a hedge, but not as the actual medium of settlement. The de-dollarization movement is aiding Bitcoins story in no way. But the replacement question is almost the wrong question entirely. The more interesting question is, what percentage of the sovereign reserves will consist of Bitcoin by 2030 as opposed to today. The number of people moving from nearly nothing to, say, two or three percent worldwide would be huge.

[DrBeer]

Will De-Dollarization Drive Bitcoin Adoption by Nations and Individuals? Short answer Yes, but in phases. But bro this act an asset just like gold rather than change the country currency. When nation look to move away from the US Dollar, their immediate alternative is rarely jumping straight onto Bitcoin their first step is usually switching to local currency trade swaps and aggressive gold accumulation.

Bitcoin is the only liquid monetary asset that has zero counterparty risk and cannot be weaponized, sanctioned, or frozen by any foreign central bank, and because of this Bitcoin will be look closer by the gov.

First, we need to understand whether de-dollarization will actually happen.
Right now, only a couple of countries are actively (and I mean actively, not just in words) "pursuing" de-dollarization, and most of them are pariah states. The rest have no intention of abandoning the dollar, and the best example is BRICS, where the idea of total de-dollarization was rejected, as was a "single BRICS currency".
All sensible countries understand perfectly well that no alliance guarantees complete economic autonomy, and you can’t buy anything on the global market with local currencies...

Nobody will get rid of their dollars; even big nations, like China, will not get rid of all their dollars. They can't; they manufacture so many goods for the Americans and get paid that it is impossible to get rid of all of them. However, it is possible not to get new ones and increase your stake in dollars; I am assuming that if anything ever happens about dedollarization, then that would be the case. Like if a nation has, let's say, 20 billion dollars in their treasury, they will not have zero, but they may not have 40 either; they may just keep it at 20 billion for many years. That might actually happen; I can see that happening, especially as someone who loves Bitcoin.

I support it if any of them ever decides to use all they have to buy Bitcoin, because, to be fair, for me, Bitcoin is better than every single fiat out there. If I were president of any nation, I would literally sell every single fiat in the treasury, and go buy Bitcoin with them And they would topple me, and I would lose my position after a week lol.

It’s not that they can’t; it’s that they don’t want to. And they don’t want to of their own accord. The reason is simple: nobody on the GLOBAL market wants their colorful pieces of paper (yuan, reais, rubles, and the like).
In fact, they aren’t even really needed within BRICS itself, due to the completely different purchasing power and economic stability! That’s why, for international transactions, there’s the dollar, and in the EU zone - the euro.

As for Bitcoin - I’m watching how things unfold, and I can’t shake my concerns about using Bitcoin as a reserve currency. In that case, Bitcoin could be driven out of the market or outlawed for individuals; such a scenario cannot be ruled out.
 

[Abiky]

Regarding Bitcoin’s volatility and other characteristics, some people say the following:
- If Bitcoin is adopted globally, it will become stable and rise in value
- Slow and expensive transactions will be resolved through the implementation of Layer 2 networks.
But... these are just assumptions, albeit fairly logical ones.

But here are some questions that remain unanswered:
- How would the banking system function with Bitcoin instead of fiat currency?
- How would a government operate without issuing money?
- As the value of Bitcoin rises, as you very accurately pointed out, debts will simply grow; how will they be repaid?

And many other equally troubling questions....

How would the banking system function with Bitcoin, instead of Fiat (you may ask)? They won't. I mean, Bitcoin's intended purpose is to be your own bank. In a world where Bitcoin becomes the dominant global currency, banks would cease to exist. The only custodians that might still be around would be centralized exchanges. As for governments, they can continue to operate without the need to issue money. They'd add Bitcoin to their reserves and use it as a digital currency. A few years ago, El Salvador adopted Bitcoin as legal tender. If this country did it, anything other country can do it. El Salvador wasn't able to either control Bitcoin or even USD. It didn't have its own currency. Did it worry about not being able to issue money? Of course not!

The main issue surrounding Bitcoin is its deflationary model. Especially if we're talking about using it as a daily currency and integrating it into the mainstream economic system. Because with deflation, people will hoard more than what they would spend. Inflation encourages people to spend, than all the other way around. De-dollarization will happen. But BTC won't become the next reserve currency or global asset. It will be another Fiat currency. Which one will it be? That's the "billion-dollar" question.

[DrBeer]

Regarding Bitcoin’s volatility and other characteristics, some people say the following:
- If Bitcoin is adopted globally, it will become stable and rise in value
- Slow and expensive transactions will be resolved through the implementation of Layer 2 networks.
But... these are just assumptions, albeit fairly logical ones.

But here are some questions that remain unanswered:
- How would the banking system function with Bitcoin instead of fiat currency?
- How would a government operate without issuing money?
- As the value of Bitcoin rises, as you very accurately pointed out, debts will simply grow; how will they be repaid?

And many other equally troubling questions....

How would the banking system function with Bitcoin, instead of Fiat (you may ask)? They won't. I mean, Bitcoin's intended purpose is to be your own bank. In a world where Bitcoin becomes the dominant global currency, banks would cease to exist. The only custodians that might still be around would be centralized exchanges. As for governments, they can continue to operate without the need to issue money. They'd add Bitcoin to their reserves and use it as a digital currency. A few years ago, El Salvador adopted Bitcoin as legal tender. If this country did it, anything other country can do it. El Salvador wasn't able to either control Bitcoin or even USD. It didn't have its own currency. Did it worry about not being able to issue money? Of course not!

The main issue surrounding Bitcoin is its deflationary model. Especially if we're talking about using it as a daily currency and integrating it into the mainstream economic system. Because with deflation, people will hoard more than what they would spend. Inflation encourages people to spend, than all the other way around. De-dollarization will happen. But BTC won't become the next reserve currency or global asset. It will be another Fiat currency. Which one will it be? That's the "billion-dollar" question.

The problem is that for Bitcoin to take hold, three conditions must be met:
1. The dollar must lose its status as the dominant global currency
2. The global fiat system must abandon the fiat model
3. Bitcoin must become the dominant global currency
Only with this combination will it become a replacement for the dollar, rather than merely an asset for accumulation.
P.S. Regarding El Salvador: "The overwhelming majority of El Salvador’s residents have returned to their usual transactions in U.S. dollars (the country’s official currency) and with bank cards.
The "Bitcoin economy showcase" project Bitcoin Beach in the El Zonte area is telling: even there, business owners note that they may not receive a single Bitcoin payment for an entire month."

[abhiseshakana]

De-dollarization will happen. But BTC won't become the next reserve currency or global asset. It will be another Fiat currency. Which one will it be? That's the "billion-dollar" question.

Dedollarization is merely a tiny bubble in the global financial ocean, insignificant compared to a sea filled with US dollars. A large amount of white colored material is visible distinct from the surrounding surface seawater but it will eventually dissipate and dissolve back into the water.

Dedolarization or hyperbitcoinization will not be happen, in fact, what is visible now is hyper dollarization simply we can see from dollar based stablecoin booming. Refusing to forget that trillions of global debt denominated in USD. To pay the debt hunting for USD is a must, which create endless demand. Another issue is often overlooked about street level dolarization which happened at unstable economic country, where population prefer transaction using USD and saving physicall USD or USD pegged stable coin, which show that they lack confidence on their own currency, or yuan, or BRICS currency.

I think El Salvador does not possess monetary sovereignty after deciding to adopt USD as its legal tender. Different with other country who have sovereign currencies, central bank, domestic monetary policy, domestic bond market, and country as lender of last resort, El Savador voluntarily surrender full monetary sovereignty to the US central Bank.  In fact, dollarization had already taken place at El Savador before Bitcoin arrived.

[DrBeer]

I have a question for the participants: if we set aside the "sacred" idea among crypto enthusiasts that "Bitcoin is a global currency", what is the actual goal of de-dollarization? Any process must have a clear, specific goal - one that offers advantages and achieves certain concrete objectives that are measurable and show positive results compared to the situation before those goals were met. So here’s the question: Who can explain the specific goals and metrics of de-dollarization?

[WillyAp]

I have a question for the participants: if we set aside the "sacred" idea among crypto enthusiasts that "Bitcoin is a global currency", what is the actual goal of de-dollarization? Any process must have a clear, specific goal - one that offers advantages and achieves certain concrete objectives that are measurable and show positive results compared to the situation before those goals were met. So here’s the question: Who can explain the specific goals and metrics of de-dollarization?

Its a pipe dream. A global currency needs much more than bitcoin in specific can offer.
Secure transmission of value. Accountability, 

The secure transmission by FIAT has speed up.
2025-26 https://usedots.com/blog/how-long-do-wire-ach-transfers-take/  max 3 days vs 1- 5 days in 1980.

Daily amount the world moves is around 10 Trillion,
Bitcoin Transactions Per Day is at a current level of 699012.0,   

To send BTC you need to set a high fee or use the lightning network, Banks vs Crypto: You usually know your bankers on that level.