CEO of the world's largest asset management company warns: Bitcoin may challenge the global status of the US dollar

On March 31, the CEO of one of the world's largest asset management companies released a 27-page annual letter to investors. In this letter, the CEO made a rare warning: if the United States cannot control the ever-expanding debt and fiscal deficit, the dollar's "global reserve currency status" built over decades may ultimately give way to emerging digital assets such as Bitcoin.

Digital assets may undermine the status of the US dollar as a reserve currency

The CEO raised a thought-provoking question on page 20 of the report: "Will Bitcoin undermine the dollar's status as a reserve currency?"

He pointed out that the United States has long benefited from the position of the dollar as the global reserve currency, but this advantage is not permanent. Since 1989, the growth rate of U.S. debt has been three times that of GDP. This year, interest expenditures alone will exceed $952 billion, surpassing defense spending. By 2030, mandatory government spending and debt service will consume all federal revenue, leading to a long-term deficit.

While warning about the risks of traditional finance, the CEO also made it clear that he does not oppose the development of digital assets. He wrote: "It needs to be stated that I clearly do not oppose digital assets. But two things can be true at the same time: decentralized finance is an extraordinary innovation. It makes the market faster, cheaper, and more transparent. However, it is precisely this innovation that could undermine America's economic advantage—if investors start to believe that Bitcoin is safer than the dollar."

In reviewing performance, the CEO pointed out that the Bitcoin ETF launched by the company in the United States became the largest launch of an exchange-traded product in history, with assets under management exceeding $50 billion in less than a year. This product ranks third in asset attraction within the entire ETF industry, second only to the S&P 500 index fund. Notably, over half of the demand comes from retail investors, with three-quarters coming from investors who had never held the company's products before. This year, the company has expanded its Bitcoin products to exchange-traded products (ETPs) in Canada and Europe.

He further pointed out that ETFs have not only achieved great success in the United States but are also becoming a key tool in promoting the development of investment culture in Europe. Currently, only one-third of European individual investors participate in capital market investments, a figure that is far lower than the over 60% in the United States. This not only causes them to miss out on the growth opportunities provided by the capital markets, but in a low-interest-rate environment, the returns on their savings accounts are often eroded by inflation.

To improve this ratio, the company is collaborating with several mature institutions and emerging platforms in Europe to jointly lower investment thresholds and enhance local financial literacy.

Optimistic about RWA, believing that tokenization is the "highway" of the future of finance.

From ETFs to the currently popular cryptocurrency technology, this CEO believes that tokenization is becoming a key force in reshaping financial infrastructure.

He wrote that the circulation of global funds today still relies on the "financial pipelines" established in an era where trading floors were dominated by loud voices and fax machines were considered revolutionary tools. Take the Society for Worldwide Interbank Financial Telecommunication (SWIFT) as an example—it supports global transactions worth trillions of dollars every day, and its operation resembles a relay race: banks pass instructions in sequence, meticulously checking details at each step. In the 1970s, when the market was smaller and transaction frequency was lower, this relay approach made sense. But today, continuing to rely on SWIFT is as inefficient as sending emails to the post office for forwarding.

In his view, the emergence of tokenization will completely change this inefficiency. If SWIFT is the postal service, then tokenization is the email itself—assets can circulate directly and in real-time, bypassing all intermediaries.

The CEO further illustrated how tokenization profoundly changes the financial ecosystem, undoubtedly showing optimism for the RWA market. "It converts real-world assets (such as stocks, bonds, and real estate) into digital tokens that can be traded online. Each token represents your ownership of a specific asset, much like a digital title deed. Unlike traditional paper certificates, these tokens are securely stored on the blockchain, making buying, selling, and transferring instant, without the cumbersome paperwork and waiting times. Every stock, every bond, every fund—every type of asset can be tokenized. Once realized, it will completely revolutionize the way we invest. The market will no longer need to close, and trades that used to take days can be settled in seconds. Hundreds of billions of dollars currently frozen due to settlement delays will be able to be immediately reinjected into the economy, driving more growth."

He stated that perhaps most importantly, tokenization will make investment more "democratized." Tokenization can achieve democratization of access. Tokenization allows for fractional ownership of assets—assets can be divided into countless small shares. This means that assets which were originally high-threshold (such as private real estate and private equity) will be open to a broader group of investors, greatly lowering the entry barrier.

Tokenization can also democratize shareholder voting. Owning stock means you have the right to vote on shareholder proposals. Tokenization makes voting more convenient, as your ownership and voting rights are recorded digitally, allowing you to participate in voting securely and without barriers from anywhere.

Tokenization can also achieve the democratization of returns. Some investments yield much higher returns than others, but often only large investors can participate. One reason is the "friction" from legal, operational, and bureaucratic barriers. Tokenization can remove these barriers, allowing more people to gain access to high-return fields.

However, the CEO also candidly pointed out that the popularization of tokenization still faces a key technical and regulatory challenge. "One day in the future, I believe tokenized funds will become a daily allocation for investors, just like ETFs – but the prerequisite is that we must tackle a key issue: identity verification."

He stated that financial transactions require strict identity verification. Smart payments and credit cards can seamlessly complete billions of identity verifications every day. Major stock exchanges and trading platforms can also achieve this when buying and selling securities. However, tokenized assets will no longer go through these traditional channels, so we need a whole new digital identity verification system.

"It sounds complicated, but the country with the largest population in the world—India, has achieved this goal. Today, over 90% of Indians can securely complete transaction verification via their smartphones."

In this annual letter, the CEO also reviewed the historical development of the capital markets, pointing out their important role in promoting social prosperity and helping individuals accumulate wealth through investment. He mentioned that further financial innovation is still needed to bridge the gap between public and private markets, and emphasized the importance of expanding investment opportunities, particularly allowing small and medium-sized investors to participate in asset classes that were originally only open to the wealthiest individuals.

Despite acknowledging the widespread economic anxiety, the CEO still tried to reassure investors, stating that such periods are not new—just like in historical cases, relying on human resilience and the power of capital markets, the economy will eventually stabilize.

Overall, this annual letter to investors warns of the risks to the dollar's global reserve status and serves as a forecast for the future of finance. From the tokenization of capital markets to breakthroughs needed in digital identity systems, the CEO reveals the irrationalities of the existing system and points out the new directions that technological and institutional innovations may bring.