Kenneth Rogoff, a former top economist at the International Monetary Fund (IMF), says that Bitcoin is weakening the power of the U.S. dollar, especially in the shadow economy — a hidden part of the global economy that is worth about $25 trillion.
Bitcoin Replacing the Dollar in Hidden Markets
Rogoff explained in a recent interview that Bitcoin is being used more and more instead of U.S. dollars in countries where people try to avoid taxes or financial rules. This is often called the “shadow economy.”
He said that while the U.S. dollar became the top global currency after World War II, now it's losing its power, with other currencies like the Chinese yuan and the euro growing stronger. At the same time, cryptocurrencies like Bitcoin are becoming a popular tool for people in these hidden markets.
Why Bitcoin Is Useful in the Shadow Economy
Bitcoin and other cryptocurrencies are hard for governments to control. This makes them useful for people trying to hide money or avoid sanctions. Rogoff says in some developing countries, the shadow economy can be up to one-third of the total economy, and Bitcoin is helping it grow.
He believes it’s wrong to say that Bitcoin has “no real value.” In fact, Bitcoin is being used in real ways — especially for avoiding U.S. financial controls and sanctions.
Impact on the U.S. Economy
Rogoff warns that because more people are using Bitcoin instead of the dollar, there is less demand for dollars globally. This is one reason interest rates in the U.S. are going up, though it's not the only reason.
He also said that this kind of crypto use will keep growing, and even new laws and regulations might not be enough to stop it.
Disclaimer: This article is
for information only and not financial advice.
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