Market News

China's Shift: VanEck Highlights Bitcoin's Role in Global Trade Amid De-Dollarization

China's recent initiatives to lessen its reliance on the US dollar signal a major shift in global financial dynamics.

VanEck experts suggest that Bitcoin may become a viable alternative for international trade, potentially settling up to 10% of global transactions.

Since the 2008 financial crisis, countries like China and Russia have been increasingly adopting alternative currencies to mitigate exposure to dollar fluctuations.

Specifically, China’s state-owned banks have been directed to reduce dollar transactions, and recent reports indicate that China and Russia are already using Bitcoin for some energy trades.

VanEck's Matthew Sigel noted that sovereign adoption of Bitcoin is accelerating, driven by demand for neutral payment options amid geopolitical tensions.

Additionally, countries such as India are also exploring local currency settlement systems, which further boosts Bitcoin's case as an international trade facilitator.

While Bitcoin is viewed as a functional monetary tool, experts caution that its volatility and regulatory challenges must be addressed to achieve mass adoption.

Moreover, the recent discovery of vulnerabilities in Chinese-made microcontrollers used in Bitcoin hardware wallets raises concerns about the security of digital assets.

As nations shift towards Bitcoin and other alternatives, the implications for traditional fiat systems and global economic stability remain to be seen.

Overall, Bitcoin's growing acceptance as a potential reserve asset reflects a broader trend of de-dollarization, though significant hurdles still lie ahead.