Warning from a Wall Street legend… eyes turn to 'here,' not the dollar

Stanley Druckenmiller, a legendary Wall Street investor, predicted that the U.S. dollar’s status as the world’s reserve currency could weaken over the long term. He said it is also possible that crypto assets such as Bitcoin and stablecoins could fill that role.

According to U.S. business outlet Forbes, on the 15th (local time) Druckenmiller said in a recent interview hosted by Morgan Stanley, “The dollar will probably outlive me, but I can’t be sure it will still be the reserve currency 50 years from now.” The remarks suggest the dollar’s position may not be permanent.

Surging U.S. government debt is cited as a key backdrop to this outlook. U.S. debt has now surpassed $38 trillion, reaching a record high. Since COVID-19, large-scale fiscal spending has continued, and rising interest rates are rapidly increasing the interest burden as well.

Druckenmiller assessed that digital assets could emerge as an alternative in this environment. “I can’t say for certain what asset will replace the reserve currency, but it could be a crypto asset I don’t prefer,” he said, adding, “Bitcoin is growing its presence as it competes with gold, a traditional safe-haven asset.”

He especially highlighted the potential of stablecoins. “Stablecoins are faster, more efficient and lower-cost than existing payment systems,” he said, predicting that “within the next 10–15 years, a significant portion of the payment system could be reorganized around stablecoin-based rails.”

Stablecoins are generally crypto assets whose value is pegged to fiat currencies such as the dollar. Interest in the industry is also expanding rapidly after the passage of the ‘Genius Act,’ a stablecoin regulatory framework prepared last year under the leadership of Donald Trump. The legislation centers on institutionalizing stablecoins whose value is fixed to existing currencies such as the dollar.

Reporter Kim Tae-rim tae@hankyung.com