CEO of the world's largest asset management company: Bitcoin may challenge the global status of the US dollar, tokenization may become the future of finance

On March 31, the CEO of a top global asset management company released a 27-page annual letter to investors. In this letter, the CEO unusually warned that if the United States cannot control its ever-expanding debt and fiscal deficit, the dollar's "global reserve currency status" built over decades may ultimately give way to emerging digital assets like Bitcoin.

Bitcoin May Undermine the Dollar's Reserve Currency Status

The CEO raised a thought-provoking question on page 20 of the report: "Will Bitcoin undermine the dollar's status as the reserve currency?"

He stated that for decades, the United States has benefited from the status of the dollar as the global reserve currency. However, this status is not a permanent guarantee. Since the "national debt clock" in Times Square started counting in 1989, the growth rate of U.S. debt has been three times that of GDP. This year, interest payments alone will exceed $952 billion, surpassing defense spending. By 2030, mandatory government spending and debt service will consume all federal revenue, resulting in a long-term deficit.

While warning about the risks of traditional finance, the CEO also made it clear that he does not oppose the development of digital assets. He wrote: "It needs to be stated that I am clearly not against digital assets. But two things can be true at the same time: decentralized finance is an extraordinary innovation. It makes markets faster, cheaper, and more transparent. However, it is this very innovation that could undermine the economic advantage of the United States—if investors begin to believe that Bitcoin is safer than the dollar."

In reviewing performance, the CEO pointed out that the Bitcoin ETF launched by the company in the United States became the largest exchange-traded product debut in history, with assets under management exceeding $50 billion in less than a year. It ranks third in asset attractiveness within the entire ETF industry, only behind the S&P 500 index fund. Notably, over half of the demand comes from retail investors, and three-quarters come from investors who have never held the company's products before. This year, the company has expanded its Bitcoin products to exchange-traded products (ETPs) in Canada and Europe.

He further pointed out that ETFs have not only achieved great success in the United States but are also becoming a key tool for driving the development of investment culture in Europe. Many European investors entering the capital market for the first time are taking their first steps through ETFs, especially the products of this company. Currently, only one-third of European individual investors participate in capital market investments, a figure that is far lower than the over 60% in the United States. This not only causes them to miss out on the growth opportunities offered by the capital markets, but in a low-interest-rate environment, the returns on their savings accounts are often eroded by inflation.

To improve this ratio, the company is collaborating with several established institutions and emerging platforms in Europe, including some well-known fintech companies, to jointly lower the investment threshold and enhance local financial literacy.

Optimistic about RWA, believing that tokenization is the "highway" of the future of finance.

From ETFs to the currently popular cryptocurrency technology, the CEO believes that tokenization is becoming a key force in reshaping financial infrastructure.

He wrote that the circulation of global funds today still relies on the "financial pipelines" established in an era when trading floors depended on voice orders and fax machines were considered revolutionary tools. Take the Society for Worldwide Interbank Financial Telecommunication (SWIFT) as an example - it supports global transactions worth trillions of dollars every day, operating more like a relay race: banks pass instructions in sequence, carefully checking details at each step. In the 1970s, when the market was smaller and transaction frequency was lower, this relay method was reasonable. But in today's context, continuing to rely on SWIFT is as inefficient as sending emails through the post office for forwarding.

Although this system was reasonable in the past, its efficiency is now difficult to support the financial demands of globalization and digitalization.

In the eyes of this CEO, the emergence of tokenization will fundamentally change this inefficiency. If SWIFT is postal service, then tokenization is the email itself—assets can circulate directly and in real-time, bypassing all intermediaries.

He further illustrated how tokenization profoundly changes the financial ecosystem, undoubtedly signaling optimism for the RWA market. "It is the conversion of real-world assets (such as stocks, bonds, real estate) into digital tokens that can be traded online. Each token represents your ownership of a specific asset, like a digital certificate of ownership. Unlike traditional paper certificates, these tokens exist securely on the blockchain, making buying, selling, and transferring instantaneous, without cumbersome paperwork and waiting times. Every stock, every bond, every fund—every type of asset can be tokenized. Once achieved, it will completely revolutionize the way we invest. The market will no longer need to close, and transactions that used to take days can be settled in seconds. The hundreds of billions of dollars currently frozen due to settlement delays will be able to be immediately reinjected into the economy, driving further growth."

He stated that perhaps most importantly, tokenization will make investment more "democratized". Tokenization can achieve the democratization of access. Tokenization allows for the fragmented ownership of assets—assets can be divided into countless small portions. This means that assets that were originally high-threshold (such as private real estate and private equity) will be open to a broader group of investors, significantly lowering the participation threshold.

Tokenization can also achieve the democratization of shareholder voting. Owning stocks means you have the right to vote on shareholder proposals for the company. Tokenization makes voting more convenient, as your ownership and voting rights are recorded digitally, allowing you to participate in voting securely and without barriers from anywhere.

Tokenization can also achieve the democratization of profits. Some investments yield returns far higher than others, but often only large investors can participate. One reason is the "friction" of legal, operational, and bureaucratic barriers. Tokenization can remove these barriers, allowing more people to gain access to high-yield fields.

However, the CEO also candidly pointed out that the widespread adoption of tokenization still faces a key technological and regulatory challenge. "One day in the future, I believe tokenized funds will become a daily allocation for investors just like ETFs - but the prerequisite is that we must overcome a key issue: identity verification."

He stated that financial transactions require strict identity verification. Some mainstream payment methods and credit cards can complete billions of identity verifications every day without obstacles. Major stock exchanges and trading platforms can also do this when buying and selling securities. However, tokenized assets will no longer go through these traditional channels, so we need a brand new digital identity verification system.

"It sounds complicated, but the country with the largest population in the world—India, has achieved this goal. Today, over 90% of Indians can securely complete transaction verification through their smartphones."

In this annual letter, the CEO also reviewed the historical development of the capital markets, highlighting its important role in promoting social prosperity and helping individuals accumulate wealth through investment. He mentioned that there is still a need to further promote financial innovation to bridge the gap between public and private markets, and emphasized the importance of expanding investment opportunities, especially allowing small and medium-sized investors to participate in asset classes that were originally only available to the wealthiest individuals.

Despite acknowledging the widespread economic anxiety, the CEO still attempted to reassure investors, stating that such times are not new—just as in historical cases, relying on human resilience and the power of capital markets, the economy will eventually stabilize.

Overall, this annual letter to investors warns of the risks to the dollar's global reserve status and serves as a forecast for the future of finance. From the tokenization reconstructing capital markets to breakthroughs needed in digital identity systems, the CEO reveals the irrationalities of the current system and points out the new directions that technological and institutional innovations may bring.