David Edwards
David Solomon, the CEO of Goldman Sachs, said he is confident in the US dollar’s hegemony and that Bitcoin does not seriously threaten the US dollar’s position as the global reserve currency. Solomon called Bitcoin a “interesting speculative asset” with valuable underlying technology in an interview with CNBC at the World Economic Forum in Davos, Switzerland.
“I do not think Bitcoin is a threat to the US dollar,” Solomon said on January 22, reaffirming his belief in the strength of the dollar.
Solomon acknowledged Bitcoin’s contribution to financial innovation but underlined that Goldman Sachs research is concentrating on its underlying blockchain technology to investigate its potential to lessen financial system friction. His words, “It’s super important,” He did concede, though, that banks are now unable to interact directly with Bitcoin due to legal restrictions.
“At the moment, from a regulatory perspective, we can’t own, we can’t principal, we can’t be involved with Bitcoin at all. If the world changes, we can have a discussion about it,” Solomon added.
The Function of Bitcoin in Dollar Dominance
Solomon’s remarks are in line with those of Texas Blockchain Council President Lee Bratcher. In order to maintain US dollar dominance, Bratcher emphasized the significance of overcollateralized dollar-pegged stablecoins.
“If we want to continue US hegemony, we need the dollar to remain the world’s reserve currency. For that to happen, we need stablecoins to proliferate because they provide dollar access to people around the world,” Bratcher told Cointelegraph.
The wider financial ecosystem and bitcoin
According to TradingView, the price of Bitcoin increased 7.89% in the last 30 days to $102,911, but the US Dollar Index (DXY) increased 0.14% to 108.31 during the same time frame, highlighting the dollar’s ongoing strength.
Goldman Sachs declared in November that it would spin out its cryptocurrency platform and establish a stand-alone business specializing in financial products based on blockchain technology. According to Goldman’s global head of digital assets, Mathew McDermott, the spinout will be finished in 12 to 18 months, subject to regulatory approvals.
Solomon’s comments imply that although blockchain technology and Bitcoin have promise, financial institutions and governments still place a high premium on the US dollar’s continued supremacy.
