BlackRock chairman Larry Fink has warned that Bitcoin could replace the US dollar as a reserve currency. In his Investors’ Letter for 2025, Fink noted that the rising US national debt could cause the US dollar to lose its position.

According to Fink, who touched on various issues in the letter, the US has greatly benefited from the Dollar’s status as the global reserve currency for several decades. However, he observed that this may not last forever, mostly because of the national debt.

The US national debt is $36.2 trillion, with interest payments this year alone set to reach $952 billion. Fink noted this is a problem, and if the government fails to control the debt, the country could enter a permanent deficit by 2030.

He said:

“By 2030, mandatory government spending and debt service will consume all federal revenue, creating a permanent deficit. If the US doesn’t get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like bitcoin.”

However, Fink clarified that he is not anti-digital assets. In fact, he praised decentralized finance and blockchain technology, noting its several advantages. Still, he believes such innovation could still undermine the US advantage, especially if more countries consider BTC a safer alternative.

Fink wrote:

“Yet that same innovation could undermine America’s economic advantage if investors begin seeing bitcoin as a safer bet than the dollar.”

The financial guru echoes sentiments shared by many who have expressed concerns about the rising US debt. Elon Musk is one such person, and the establishment of the Department of Government Efficiency (DOGE) was partly to address this concern. Interestingly, some in the crypto industry have promoted the creation of a strategic Bitcoin Reserve as a solution to the US debt crisis.

Fink promotes tokenization

Meanwhile, Fink’s letter, titled The Democratization of Investing, also promoted tokenization, which the financial expert believes is the next evolution for the financial sector. In his letter, he compared tokenization and current SWIFT technology used by financial institutions, noting that it is like email to the postal service.

He said:

“If SWIFT is the postal service, tokenization is email itself — assets move directly and instantly, sidestepping intermediaries.”

Fink believes that tokenization will revolutionize finance. If every asset can be tokenized, the market can operate 24/7, and transactions will happen in seconds. This will enable the full utilization of billions immobilized due to settlement delays.

The BlackRock chairman further highlighted the advantages of tokenization, noting that it democratizes access, yield, and shareholder voting. In his view, all that is needed for tokenized assets to see full adoption is blockchain-based digital verification solutions.

He said:

“The takeaway is clear. If we’re serious about building an efficient and accessible financial system, championing tokenization alone won’t suffice. We must solve digital verification, too.”

Fink’s bullishness on tokenization and pro-crypto sentiments are not surprising. BlackRock is leading the embrace of the crypto industry by traditional investors, with its Bitcoin exchange-traded fund (IBIT) being the biggest digital asset ETF with   $50 billion in assets under management (AUM).

The firm is also a leader in the tokenization sector. Its BUIDL is a tokenized US treasury product in partnership with Securitize. It already has around $1.5 billion in market cap and keeps growing.

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