Is Crypto Is Quietly Undermining Dollar Dominance, According to IMF Chief Economist?
Economist Kenneth Rogoff warns that cryptocurrency is increasingly chipping away at the global dominance of the U.S. dollar, especially in the underground economy.
In a recent interview with Bloomberg, the former IMF chief economist and Harvard professor explained that although crypto hasn’t taken over the legal financial system, it’s rapidly becoming the preferred tool in sectors where governments have limited control.
Rogoff emphasized that crypto is replacing cash — particularly U.S. dollars — in unregulated markets such as tax evasion and illicit trade. He estimates that the global underground economy makes up roughly 20% of the world’s GDP, worth as much as $25 trillion. While criminal activity is a small part, the majority involves legal gray areas, like tax avoidance and bypassing regulations.
Traditionally, the U.S. dollar was king in these markets, but crypto is now becoming the go-to currency due to its borderless, pseudonymous nature. This shift threatens the United States’ “exorbitant privilege” — the benefits of controlling the world’s primary reserve currency, including economic influence and financial surveillance capabilities.
Rogoff pushed back against critics who claim that cryptocurrencies are worthless. He argued that crypto clearly has value, particularly as a medium of exchange in areas where governments can’t easily intervene.
“Crypto can’t replace the dollar in the legal economy,” Rogoff said. “But in the underground economy, it already is.”
Even with increased regulation, Rogoff believes crypto will continue to thrive where government oversight is weakest — a sign that its impact on global finance is far from over.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
