Can Cryptocurrency Replace the US Dollar?

Even though its value is no longer pinned to great stacks of gold in Fort Knox, the US dollar is a stable and trusted currency worldwide.

- NEIL J. RUBENKING

It’s the reserve currency for the world, supporting international transactions and all aspects of the global economy. But will it continue to hold that position? Might Bitcoin or another cryptocurrency eventually replace it?

At the virtual RSA security conference (RSAC 2021) in May, Dr. Kenneth Geers, external communications analyst for Very Good Security, explored this topic, along with Very Good Security’s Chief Information Security Officer (CISO) Kathy Wang. “Is cryptocurrency going to change my life? Change the world?” asked Geers. “Will it bring the end of the nation-state?”

Geers led off by pointing out Bitcoin’s amazingly meteoric rise. On May 22, 2010—a day now dubbed Bitcoin Pizza Day—early Bitcoin miner Laszlo Hanyecz wanted some pizza and offered to pay 10,000 Bitcoins for a pair of pies from Papa John’s. At today’s exchange rate, that’s easily $400 million.

A LITTLE CURRENCY HISTORY

To understand whether cryptocurrency can serve as a worldwide reserve currency, we need to first understand the current situation, so Geers led listeners on a trip through history. He pointed out that in wartime, banks can have their monetary reserves stolen, either captured by the enemy or appropriated by their own country. During WWII, banks in England and France shipped their gold to the US for safekeeping.