In a recent interview, Goldman Sachs CEO David Solomon said that he does not see Bitcoin as a threat to the supremacy of the US dollar.
Sitting in an interview with CNBC yesterday while attending the World Economic Forum in Davos, Switzerland, Solomon said that the largest crypto by market cap is an ‘interesting speculative asset’ and that he does not believe it can challenge the US dollar as the de facto global asset.
The Goldman Sachs CEO added that the potential of digital currencies and the underlying blockchain technology that they are deployed on is remarkable. However, access to the technology is somewhat restricted for banks, Solomon said.
He noted existing legal and regulatory barriers as roadblocks that make it difficult for banks to adopt and implement the technology. Solomon also said that under current restrictions, Goldman Sachs can’t hold, invest, or engage in Bitcoin directly.
Blockchain could streamline traditional finance
As many analysts are hesitant to use Bitcoin as a direct financial tool, Solomon talked about the substantial potential of blockchain technology, which serves as the foundation of Bitcoin.
“The underlying technology is critical, and we are conducting significant research to explore ways it can reduce friction in the financial system,” he said.
Last November, the company shared plans to spin off its Bitcoin platform as an independent subsidiary. Mathew McDermott, global head of digital assets at Goldman Sachs, said that the intention behind the proposed plan is to develop and trade blockchain-based financial instruments. The subsidiary is planned to launch within the next 12-18 months, subject to regulatory permission.
Stablecoins could extend US dollar’s dominance over Bitcoin
The debate around Bitcoin’s impact on the US dollar’s global dominance has also brought stablecoins into the spotlight, which many experts believe could serve as a tool to extend USD’s dominance. Lee Bratcher, the president of the Texas Blockchain Council, said in a recent interview, “If we want to continue US hegemony, we need the dollar to remain the world’s reserve currency.”
In order for the US dollar’s global dominance to continue, Bratcher said that stablecoins should be allowed to thrive because they give people from across the world easy access to the fiat currency.
The stablecoin market’s capitalization currently stands at over $220.64 billion. Tether (USDT) boasts the largest valuation of more than $138.5 billion. Meanwhile, Circle’s USD Coin (USDC), the second largest stablecoin in the market, has a market cap of approximately $51.51 billion.
The US dollar has sustained its value even though Bitcoin continues to grow more popular and its price continues to soar to new peaks. The US Dollar Index (DXY) is at 108.277, and is currently up 0.21% over the past month, according to data from TradingView. Meanwhile, Bitcoin is trading at $102,448.96 after rising more than 8% during the same period.
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