5 obstacles on the path to a global reserve

CZ (Binance) reignites the debate: Can Bitcoin truly become a global reserve? Key data, real obstacles, and concrete scenarios of de-dollarization, with updated reflections and supporting additions.

The dollar still dominates: despite the momentum of cryptocurrencies, Bitcoin is not ready to replace the US currency as a global reserve. Changpeng Zhao’s (CZ) intervention in Hong Kong has reignited the topic of de-dollarization, but the numbers and market structure indicate a long path, marked by technical constraints, heterogeneous regulations, and liquidity limits. It must be said that interest is growing, but the prerequisites for a global reserve remain challenging.

According to the public COFER data from the IMF updated to the first quarter of 2025, the dollar still holds about 58% of global currency reserves, a share that reflects network effects and market depth. Industry analysts and international reports also highlight infrastructural and stability limits that complicate the systemic adoption of cryptocurrencies as reserves, a point also emphasized in the analyses of the global regulators’ bank BIS. In our work, it is clear that the adoption of layer 2 is accelerating, but market depth and custody practices remain insufficient for a global reserve role.

The Fact: CZ Revives the Topic at Bitcoin Asia 2025

During the Bitcoin Asia 2025 event in Hong Kong, the founder of Binance described Bitcoin as “digital gold” and reiterated confidence in its long-term role, while acknowledging the network’s technical limitations. The event, which according to some estimates saw the participation of 10,000–15,000 people, received widespread international media coverage, as also reported by the South China Morning Post. In this context, enthusiasm and caution went hand in hand.

• Location and date: Hong Kong, 2025.
• BTC network capacity: the blockchain currently handles about 7 tx/s without second-layer solutions.
• Prices and forecasts: the price targets mentioned by CZ in the past are personal opinions reported by the specialized press and not operational indications.

The numbers to know

• Dollar share in global foreign exchange reserves: according to IMF COFER data, the dollar holds about 58% of reserves, reflecting network effects, market depth, and the role of US Treasuries.
• Bitcoin Market Capitalization: CoinMarketCap reports that, at certain stages, Bitcoin has exceeded one trillion dollars, yet remains significantly below the overall value of global official reserves in USD.
• Annualized historical volatility of BTC: historical data indicates fluctuations that can reach tens of percentage points per year, significantly higher than major fiat currencies.
• Second layer (Lightning Network): the growing use of the Lightning network for micropayments and rapid transfers is monitored by public trackers like BitcoinVisuals and Amboss.space, highlighting the expansion of nodes and operational capacity.

De-dollarization: what drives it and what holds it back

The push towards a reduced dependence on the dollar stems from geopolitical motivations, technological innovations, and risk management strategies. An interesting aspect is that, even as alternatives and instruments grow, the dollar’s infrastructure and its liquidity primacy remain crucial for the confidence of operators.

• US Debt and Monetary Policy: some countries diversify reserves to mitigate macroeconomic risks and rates.
• BRICS Initiatives: the group has promoted, at various stages, the exchange in local currencies to reduce dependence on the dollar in specific channels.
• Payment alternatives: the adoption of systems like CIPS and cross-border digital networks expands options beyond the dollar.
• Sanctions regime: international restrictions have encouraged alternative payment solutions, including digital assets in niche contexts.

Why Bitcoin is not (yet) a global reserve: 5 key obstacles

1. Scalability: the main network of Bitcoin handles few transactions per second; layer 2 solutions alleviate the load, but mature standards, interoperability, and security are needed.
2. Volatility: the wide price swings limit the use of Bitcoin as a unit of account and as a low-risk reserve for central banks and sovereign funds.
3. Liquidity and market depth: the dollar dominates exchanges, bonds, and derivatives, while Bitcoin, although progressing, remains distant in terms of scale and market depth.
4. Regulation and coordination: the fragmentation of rules (KYC/AML, taxation, custody) and the absence of multilateral agreements hinder the institutional adoption of Bitcoin as a reserve.
5. Governance and technological risk: protocol changes, potential attacks, and reliance on critical infrastructures increase operational risks, which are not consistent with the prudent mandates of central banks.

Realistic Scenarios: Coexistence and Gradual Adoption

In the short to medium term, a coexistence between the dollar, strengthened national currencies, and digital assets held in institutional portfolios is more plausible. In this context, adoption proceeds in small, often experimental steps.

• Selective diversification: some public or corporate treasuries might include small allocations of BTC as a non-correlated reserve.
• Cross-border regulations: the use of Bitcoin as a settlement asset can establish itself in niches with high digital connectivity.
• Stabilization tools: the use of derivatives, asset baskets, and sovereign funds with experimental mandates can help mitigate volatility.

International Trade: What Would Really Change

The use of Bitcoin in cross-border payments could reduce time and fees, especially with the adoption of layer 2 solutions. It should be noted that, for effective implementation, strategies for hedging against volatility, secure custody solutions, and harmonized rules for compliance and reporting are needed.

• Costs: faster transfers and potentially less expensive compared to traditional banking channels.
• Risk of sanctions: some actors may attempt to circumvent restrictions, but institutional adoption will depend on compliance and traceability.
• Most receptive sectors: high-margin digital services and B2B payments appear to be likely candidates; for low-margin goods, adoption is less immediate.

Voices in Comparison: Beyond CZ’s Optimism

While CZ’s optimism on Bitcoin contrasts with more cautious views, economists and institutions remind that reserve currencies benefit from strong historical inertia, mature markets, and a consolidated rule of law. For example, the IMF highlights that ongoing diversification does not quickly replace the dollar, while the BIS points out critical issues related to the scalability and stability of cryptocurrencies for systemic use in payments.

Conclusions

The de-dollarization progresses at different speeds and Bitcoin is gaining relevance as a scarce digital asset; however, amidst volatility, limited scale, and regulatory issues, the transformation of Bitcoin into a global reserve requires time, shared standards, and increasing institutional trust. In this context, the path appears gradual.

• In the short term: coexistence and targeted experiments are expected, without the immediate replacement of the dollar.
• In the medium term: expansion of infrastructure (custody, audit, layer 2) and harmonized regulations will be decisive.
• Key driver: reduction of perceived volatility, deepening of markets, and multilateral agreements will determine the next developments.