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Billionaire Druckenmiller says ledger-based system could replace USD worldwide


cointelegraph.com 12 May 2021 04:10, UTC
Reading time: ~3 m

Billionaire hedge fund manager Stanley Druckenmiller has forecast the possibility of a crypto-derived ledger system overtaking the U.S. dollar as a global reserve currency.

The hedge fund boss noted that if there were to be a U.S. dollar replacement it “would be some kind of ledger system invented by some kids from MIT or Stanford or some other engineering school that hasn't even happened yet, that can replace the dollar worldwide.”

He made the comments in an interview with CNBC’s Squawk Box. Druckenmiller noted that crypto is often promoted as a hedge against inflation, which has become more relevant of late:

“Well, you probably don't remember this joke, but five or six years ago, I said that that crypto was a solution in search of a problem. And that's why I didn't play crypto the first wave because we already have the dollar. What do we need to look for?”

But he went on to add that ongoing financial stimulus was an issue: “Well, the problem has been clearly identified. It's Jerome Powell and the rest of the world, central bankers. There's a lack of trust. So sort of groping for an answer for a central case.”

Druckenmiller reportedly invested in Bitcoin earlier this year and told Squawk Box that it’s unlikely that he believes it's Bitcoin will be usurped by other cryptocurrencies as the top store of value asset:

"It's going to be very hard to unseat Bitcoin, as a store of value asset, because it has a 14 year old brand, it's been around long enough, and obviously, there's a finite supply."

Druckenmiller noted that while Ethereum is leading the way when it comes to building smart contracts, he does not see it dominating everyday transactions. He believes that the next generation of developers is likely to improve on current blockchain technology leaving current solutions behind.

"The quality of the competition that's going to come against the incumbents in this space is going to be brutal," he said. "That's why I think it's just too early to call who is going to be the winner when it comes to the payment system, commerce, that kind of stuff."

Druckenmiller doesn’t see alternative fiat currencies taking over from USD however because “Europe is a complete mess,” and “Who's going to trust the Chinese?”

"5-6 years ago I said #crypto was a solution in search of a problem," says Stan Druckenmiller. "The problem has been clearly identified. It is Jerome Powell and the rest of the world's central bankers. There is a lack of trust." pic.twitter.com/goCVQ1jp67

— Squawk Box (@SquawkCNBC) May 11, 2021

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