VanEck: Bitcoin Can Settle 10% of Global Trade Amid China’s De-Dollarization

China’s recent directive for its state-owned banks to decrease reliance on the US dollar has amplified a growing trend among countries seeking alternatives to the dominant reserve assets. In some instances, Bitcoin has emerged as a viable competitor.

BeInCrypto spoke with experts from VanEck, CoinGecko, Gate.io, HashKey Research, and Humanity Protocol to understand Bitcoin’s rise as an alternative to the US dollar and its potential for greater influence in global geopolitics.

The Push for De-Dollarization

Since the 2008 global financial crisis, China has gradually reduced its reliance on the US dollar. The People’s Bank of China (PBOC) has now instructed state-owned banks to reduce dollar purchases amid the heightened trade war with US President Donald Trump.

China is among many nations seeking to lessen its dependence on the dollar. Russia, like its southern neighbor, has received an increasing number of Western sanctions– especially following its invasion of Ukraine.

The United States, the European Union, the United Kingdom, and other allies imposed unprecedented international sanctions on Russia, targeting its central bank and major financial institutions and restricting access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) for some financial institutions.

In response, Russia halted trading of US dollars and euros on the Moscow Stock Exchange (MOEX). Recently, BeInCrypto also reported that Russia has been quietly using Bitcoin for international trade to bypass sanctions.

Furthermore, Rosneft, a major Russian commodities producer, has issued RMB-denominated bonds, indicating a shift towards RBM, the Chinese currency, and a move away from Western currencies due to sanctions.‬

This global shift away from predominant reserve currencies is not limited to countries affected by Western sanctions. Aiming to increase the Rupee’s international use, India has secured agreements for oil purchases in Indian Rupee (INR) and trade with Malaysia in INR.

The country has also pursued creating a local currency settlement system with nine other central banks.

As more nations consider alternatives to the US dollar’s dominance, Bitcoin has emerged as a functional monetary tool that can serve as an alternative reserve asset.

Why Nations Are Turning to Bitcoin for Trade Independence

Interest in using cryptocurrency for purposes beyond international trade has also grown. In a notable development, China and Russia have reportedly settled some energy transactions using Bitcoin and other digital assets.

“Sovereign adoption of Bitcoin is accelerating this year as demand grows for‬‭ neutral payments rails that can circumvent USD sanctions,” Matthew Sigel, Head of Digital Assets Research at VanEck, told BeInCrypto.

Two weeks ago, France’s Minister of Digital Affairs proposed using the surplus production of EDF, the country’s state-owned energy giant, to mine Bitcoin.

Last week, Pakistan announced similar plans to allocate part of its surplus electricity to Bitcoin mining and AI data centers.

Meanwhile, on April 10, New Hampshire’s House passed HB302, a Bitcoin reserve bill, by a 192-179 vote, sending it to the Senate. This development makes New Hampshire the fourth state, after Arizona, Texas, and Oklahoma, to have such a bill pass a legislative chamber.

If HB302 is approved by the Senate and signed into law, the state treasurer could invest up to 10% of the general fund and other authorized funds in precious metals and specific digital assets like Bitcoin.

According to industry experts, this is only the beginning.

VanEck Predicts Bitcoin to Become a Future Reserve Asset

Sigel predicts Bitcoin will become a key medium of exchange by 2025 and, ultimately, one of the world’s reserve currencies.

His forecasts suggest Bitcoin could settle 10% of global international trade and 5% of global domestic trade. This scenario would lead to central banks holding 2.5% of their assets in BTC.

According to him, China’s recent de-dollarization will prompt other nations to follow suit and lessen their reliance on the US dollar.

“China’s de-dollarization efforts are already having second- and third-order effects that create‬‭ opportunities for alternative assets like Bitcoin. When the world’s second-largest economy‬ actively reduces its exposure to US Treasuries and promotes cross-border trade in yuan or‬ ‭through mechanisms like the mBridge project, it signals to other nations—especially those with‬‭ strained ties to the West—that the dollar is no longer the only game in town,” Sigel said. ‭

For Zhong Yang Chan, Head of Research at CoinGecko‬, these efforts could prove catastrophic for the United States’ dominance.

“Broader de-dollarization efforts by China, or other major economies, will threaten the status of‬ ‭ the dollar’s global reserve currency status. This could have [a] profound impact on the US and its‬ ‭ economy, as this would lead to nations reducing their holdings of US treasuries, which the US‬ ‭ relies on to finance its national debt,” he told BeInCrypto.

However, the strength of the US dollar and other dominant currencies has already shown signs of weakening.

A General Wave of Currency Decline

Sigel’s research shows that the four strongest global currencies—the US dollar, Japanese yen, British pound, and European euro—have lost value over time, particularly in cross-border payments.

The decline of these currencies creates a void where Bitcoin can gain traction as a key alternative for international trade settlements.

“This shift isn’t purely about promoting the yuan. It’s also about minimizing vulnerability to‬‭ US sanctions and the politicization of payment rails like SWIFT. That opens the door for‬‭ neutral, non-sovereign assets—especially those that are digitally native, decentralized, and‬‭ liquid,” Sigel added.

This lack of national allegiance also sets Bitcoin apart from traditional currencies.

Bitcoin’s Appeal: A Non-Sovereign Alternative

Unlike fiat money or central bank digital currencies (CBDCs), Bitcoin doesn’t respond to any one nation, which makes it appealing to some countries.

For Terence Kwok, CEO and Founder of Humanity Protocol, recent geopolitical tensions have heightened this belief.

“Trust‬‭ in‬‭ traditional‬‭ financial‬‭ infrastructure‬‭ is‬‭ eroded‬‭ during‬‭ geopolitical‬‭ standoffs.‬‭ Bitcoin,‬‭ with‬‭ its‬‭ transparent‬‭ ledger‬‭ and‬‭ decentralized‬‭ governance,‬‭ offers‬‭ a‬‭ compelling‬‭ alternative‬‭ for‬‭ value‬‭ storage‬‭ and‬‭ peer-to-peer‬‭ settlement,‬‭ especially‬‭ where‬‭ neutral,‬‭ non-sovereign‬‭ options‬‭ are‬‭ preferable.‬‭ In‬‭ that‬‭ sense,‬‭ geopolitical‬‭ tension‬‭ can‬‭ inadvertently‬‭ catalyze‬‭ innovation‬‭ and‬‭ adoption‬‭ in decentralized finance,” Kwok told BeInCrypto.

Because Bitcoin’s supply is limited, it provides a more secure option for nations whose local currency loses value through inflation.

“‭Bitcoin,‬‭ due‬‭ to‬‭ its‬‭ scarcity‬‭ and‬‭ decentralized‬‭ nature,‬‭ is‬‭ completely‬‭ different‬‭ from‬‭ the‬‭ centralized‬‭ fiat‬‭ currency‬‭ system‬‭ and‬‭ is‬‭ not‬‭ affected‬‭ by‬‭ changes‬‭ in‬‭ monetary‬‭ policy.‬‭ Therefore,‬‭ it‬‭ can‬‭ be‬‭ used‬‭ as‬‭ a‬‭ hedging‬‭ tool‬‭ to‬‭ cope‬‭ with‬‭ the‬‭ depreciation‬‭ of‬‭ fiat‬‭ currencies‬‭ or‬‭ geopolitical‬‭ risks.‬‭ Especially‬‭ in‬‭ the‬‭ context‬‭ of‬‭ rising‬‭ inflation‬‭ or‬‭ challenges‬‭ to‬‭ the‬‭ dominance‬‭ of‬‭ the‬‭ US‬‭ dollar,‬‭ allocating‬‭ some‬‭ Bitcoin‬‭ can‬‭ help‬‭ diversify‬‭ investment‬‭ risks and provide investors with more robust asset protection,” ‭Kevin Guo, Director of HashKey Research‬, added to the conversation.

For these same reasons, experts don’t expect Bitcoin to replace fiat currencies fully but rather provide a vital alternative for certain cases.

A Replacement or an Alternative?

While Bitcoin offers several advantages over traditional currencies, Gate.io’s Kevin Lee doesn’t foresee its eventual adoption causing a complete overhaul of the currency reserve system.

“Bitcoin‬‭ is‬‭ increasingly‬‭ being‬‭ recognized‬‭ for‬‭ its‬‭ unique‬‭ technological‬‭ characteristics,‬‭ such‬‭ as‬‭ fixed‬‭ supply,‬‭ decentralized‬‭ governance,‬‭ and‬‭ borderless‬‭ accessibility.‬‭ However,‬‭ I‬‭ don’t‬‭ believe‬‭ it‬‭ is‬‭ meant‬‭ to‬‭ replace [the]‬‭ traditional‬‭ fiat‬‭ system,‬‭ but‬‭ rather‬‭ an‬‭ alternative‬‭ to‬‭ it‬‭ for‬‭ various‬‭ business‬‭ use‬‭ cases,‬‭ particularly‬‭ for‬‭ diversification‬‭ and‬‭ long-term‬‭ value‬‭ preservation strategies,” Lee told BeInCrypto.

Guo agreed with this last point, adding that Bitcoin will be more appealing case-by-case.

“Countries‬‭ may‬‭ selectively‬‭ adopt‬‭ Bitcoin‬‭ based‬‭ on‬‭ their‬‭ own‬‭ economic‬‭ needs,‬‭ but‬‭ its‬‭ application‬‭ areas‬‭ are‬‭ mainly‬‭ concentrated‬‭ in‬‭ niche‬‭ markets‬‭ such‬‭ as‬‭ cross-border‬‭ remittances,‬‭ circumventing‬‭ sanctions,‬‭ and‬‭ hedging‬‭ inflation,” he said.

Bitcoin must first address several of its shortcomings before it can become truly competitive in the long run.

What Challenges Still Face Bitcoin’s Wider Adoption?

Due to its relatively new status and lack of full development, Bitcoin suffers from shortcomings that prevent mass adoption.

“‬‭As‬‭ with‬‭ any‬‭ emerging‬‭ asset‬‭ class,‬‭ Bitcoin‬‭ faces‬‭ inherent‬‭ challenges,‬‭ including‬‭ market‬‭ volatility,‬‭ evolving‬‭ regulatory‬‭ frameworks,‬‭ infrastructure‬‭ maturity,‬‭ and‬‭ cyclical‬‭ hypes.‬‭ These‬‭ factors‬‭ may‬‭ impact‬‭ its‬‭ short-term‬‭ adoption‬‭ pace,” Lee explained.

To that point, Kwok added:

“Bitcoin’s‬‭ price‬‭ swings‬‭ make‬‭ it‬‭ less‬‭ viable‬‭ for‬‭ day-to-day‬‭ transactions‬‭ or‬‭ as‬‭ a‬‭ primary‬‭ reserve‬‭ asset‬‭ today.‬‭ Furthermore,‬‭ if‬‭ major‬‭ powers‬‭ enforce‬‭ strict‬‭ capital‬‭ controls‬‭ or‬‭ implement‬‭ hostile‬‭ crypto‬‭ policies,‬‭ it‬‭ could‬‭ slow‬‭ down‬‭ adoption‬‭ despite‬‭ broader‬‭ macro‬‭ trends‬‭ in‬‭ its favor.‬”

Meanwhile, there’s the competitive advantage of stablecoins, which currently dominate cross-border payments.

“Crypto‬‭ assets‬‭ represented‬‭ by‬‭ US‬‭ dollar‬‭ stablecoins‬‭ (such‬‭ as‬‭ USDT‬‭ and‬‭ USDC)‬‭ are‬ ‭ rapidly‬‭ occupying‬‭ the‬‭ main‬‭ market‬‭ of‬‭ cross-border‬‭ payments‬‭ and‬‭ blockchain‬‭ transactions.‬ Stablecoins have‬‭ low‬‭ volatility‬‭ due‬‭ to‬‭ their‬‭ peg‬‭ (mostly‬‭ to‬‭ the‬‭ US‬‭ dollar),‬‭ making‬‭ them‬‭ the‬‭ preferred‬‭ tool‬‭ for‬‭ international‬‭ transactions‬‭ and‬‭ fund‬‭ transfers,‬‭ while‬‭ Bitcoin‬‭ is‬‭ more‬‭ often‬‭ used‬‭ as‬‭ a‬‭ store‬‭ of‬‭ value‬‭ or‬‭ speculative‬‭ asset,” Guo, Director of HashKey Research‬ told BeInCrypto.

The Bitcoin network has also experienced problems that have exacerbated global demand.

Bitcoin Network Under Strain

Since the beginning of the year, Bitcoin has experienced a significant slowdown in network activity, despite the asset’s bullish performance.

“The‬‭ usage‬‭ rate‬‭ of‬‭ the‬‭ Bitcoin‬‭ network‬‭ is‬‭ declining,‬‭ and‬‭ its‬‭ on-chain‬‭ transaction‬‭ fees‬‭ have‬‭ dropped‬‭ to‬‭ the‬‭ lowest‬‭ point‬‭ since‬‭ 2012,‬‭ indicating‬‭ that‬‭ network‬‭ activity‬‭ is‬‭ gradually‬‭ decreasing,” Guo said.

Recent data confirms this. The number of Bitcoin transactions has fallen significantly since the last quarter of 2024. Bitcoin registered over 610,684 transactions in November, but that number dropped to 376,369 in April, according to Glassnode data.

BTC number of transactions. Source: Glassnode.

The number of Bitcoin active addresses paints a similar picture. In December, the network had nearly 891,623 addresses. Today, that number stands at 609,614.

Bitcoin number of active addresses. Source: Glassnode.

This decline suggests reduced demand for its blockchain in terms of transactions, usage, and adoption, meaning fewer people are actively using it for transfers, business, or Bitcoin-based applications.

Meanwhile, the Bitcoin network must also ensure its infrastructure is efficient enough to meet global demand.

Can Bitcoin Scale for Global Use?

In 2018, Lightning Labs launched the Lightning Network to reduce the cost and time required for cryptocurrency transactions. Currently, the Bitcoin network can only handle around seven transactions per second, while Visa, for example, handles around 65,000.

“If‬‭ expansion‬‭ solutions‬‭ (such‬‭ as‬‭ the‬‭ Lightning‬‭ Network)‬‭ fail‬‭ to‬‭ become‬‭ popular,‬‭ Bitcoin’s‬‭ ability‬‭ to‬‭ process‬‭ only‬‭ about‬‭ 7‬‭ transactions‬‭ per‬‭ second‬‭ will‬‭ be‬‭ difficult‬‭ to‬‭ support‬‭ global‬‭ demand.‬‭ At‬‭ the‬‭ same‬‭ time,‬‭ as‬‭ Bitcoin‬‭ block‬‭ rewards‬‭ are‬‭ gradually‬‭ halved,‬‭ the‬‭ decline‬‭ in‬‭ miners’ income may threaten the long-term security of the network,” Guo, Director of HashKey Research‬ explained.

While the confluence of geopolitical shifts and Bitcoin’s inherent characteristics undeniably create a space for its increased adoption as an alternative to the US dollar and even a potential reserve asset, significant hurdles remain.

Achieving mainstream Bitcoin adoption hinges on overcoming scalability, volatility, regulatory hurdles, stablecoin competition, and ensuring network security.

The unfolding panorama suggests Bitcoin will carve out an important role in the global financial system, though a complete overhaul of established norms seems unlikely in the immediate future.

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