While Useful, Bitcoin Will Not Replace the U.S. Dollar, Russian Analyst Warns

Viktor Pershikov, a Russian expert in financial markets, has explored the opportunities that crypto and bitcoin will bring to Russia following the laws approved recently by President Putin. Pershikov stated that, while some cryptocurrencies present interesting opportunities as payment tools, ultimately, no cryptocurrency can currently substitute for the U.S. dollar.

Russian Analyst States Bitcoin Won’t Be Able to Substitute the U.S. Dollar, Calls Stablecoins Incomplete Replacements

Viktor Pershikov, a Russian financial analyst with over 15 years of experience, has given his take on the role that bitcoin and crypto, in general, may play in substituting the U.S. dollar. The need for a dollar substitute, or at least an alternate system separated from the dollar hegemony has surged after the enactment of sanctions against Russia and its allies due to its involvement in the Russia-Ukraine conflict.

In an interview offered to Absatz, Pershikov stated that cryptocurrencies can be profiled as fiat replacements, given that they can fulfill the same functions. However, he doubts bitcoin can be a substitute for the U.S. dollar, at least not yet.

He stressed:

I do not think that cryptocurrency will replace, for example, the US dollar or some other assets in the future. The main reason is high volatility. While you send this bitcoin, although it quickly reaches the recipient, the cost may change, which will affect the transaction.

Dollar-pegged stablecoins, which have a combined market cap of over $100 billion, can also be used for this task. However, Pershikov stated these were “incomplete substitutes” to the U.S. dollar as they are still subject to U.S. regulation. “Basically, we are trading one awl for another. The U.S. dollar is backed by the policy of the Federal Reserve System (FRS), and the tether is backed by a commercial company that is also related to the U.S.,” he assessed.

Nonetheless, President Putin has called to “seize the moment” and create a digital assets framework to incentivize the circulation of digital assets. Putin recently signed a new law that defines the conditions under which digital assets can be used to complete foreign trade transactions.

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