Hilary Clinton's comments have sent the crypto World alight, generating reactions from both enthusiasts and non-enthusiasts on social media and the mainstream. One of the more striking statements was the brief admission of the 'threat' Bitcoin poses in becoming a reserve currency and ultimately competing with the dollar's global acceptance.

While we are still far away from such a feat, the statement came across as sort of bitter-sweet for me. On one hand, seeing that supporters of the legacy system are quite concerned with the potential of the space, and BTC in particular is something I consider a positive given that they recognize the space and see its potential, but have little idea on how to control it.

However, I do have an issue with the thought of BTC as a reserve currency being labelled a 'threat'. I absolutely do not think it is a threat to anything or anyone but supporters of the old legacy system. Yes, there are merits to having the dollar as a reserve currency such as an ability to mint currency almost on demand as well as borrow at relatively cheaper rates compared to the rest of the World.

In hindsight though, it is probably in everyone's best interest if Bitcoin or some other crypto became a reserve currency. Over the last two decades, we have seen a slip in percentage dominance of nations holding the U.S dollar from 71% in 2001 to 59% in 2020. While it isn't alarming, this coupled with the rise in the reserve status of other currencies around the World such as the Chinese Yuan is a cause for long term concern and points to one thing.

Nations Want A Better Deal

Russia has always advocated for a globally acceptable currency that won't be issued by the U.S, or any nation. While of course there is political undertone and might be sinister motives behind such calls,it certainly does appear that other Countries of the World are seemingly fed up with the status quo.

This is particulatly true for developing countries whose foreign reserves are often determined by the strength of their exports. With most trade transactions performed in the dollar, nations are often at a disadvantage where they consistently have to devalue their own currencies in order to make their exports competitive.

This has pushed many developing nations to seek out trade alternatives that ultimately gave rise to the Yuan as a reserve currency when they started offering direct trade swaps (without the U.S dollar). While it doesn't mean the dollar will crash any time soon, these genuine symptoms of concern should not be taken lightly.

What Bitcoin Offers

Bitcoin as a reserve currency offers a neutral plane for countries to get involved, and will likely sell more trust in the system than what the legacy system currently offers. The attraction of developing countries to crypto is likely because they have seen the potential it poses as a great equalizer from legacy economy restrictions.

Conclusion

There is also the angle of this solution being people driven, rather than government driven. Nations through Governments could still largely seize the initiative for growth and blockchain dominance, but it will have to be in partnership with her citizens on a negotiable basis. The times and changing, and soon perhaps the World will come to realize the inevitability of change.