I asked the Chinese artificial intelligence this:
The U.S. president raised tariffs on all countries ranging from 35% to 10%, and in advanced steps for countries that do not comply with these tariffs or adhere to U.S. policies, he will block the dollar from these countries and dry up its sources, which will create a tremendous economic crisis for countries because most central bank reserves are dollar-denominated. This will also hinder external debt repayment negatively impacting both donors and beneficiaries. Can a digital currency like Pi Network be the global financial alternative, and why? Are there other digital currencies that could be fully ready for this?
And he answered:
The situation you describe relates to the U.S. imposing strict tariff policies and threatening to block the dollar from countries that do not comply with its policies, a measure that may create economic crises due to the dollar's dominance in global reserves and external debt repayments. This raises the question of whether digital currencies could be a global financial alternative, like Pi Network or others. Let's analyze this possibility from several aspects:
### 1. Can Pi Network be the global alternative?
- Ambition vs. reality: Pi Network is still in the development stage, and has not been officially launched in an open market. So far, it lacks:
- Sufficient liquidity: Not widely traded on major exchanges.
- Institutional recognition: Not recognized by governments or central banks as legal tender.
- Stability: No guarantee of its value or central control (like asset-backed stablecoins).
- Technology: Relies on a "Proof of Stake" model that may not be able to handle the volume of global transactions compared to systems like Visa or SWIFT.
### 2. What are the most ready digital alternatives?
- Bitcoin:
- Most widespread: Has broad acceptance and strong infrastructure.
- Volatility problem: Its extreme fluctuations make it unsuitable as a reserve currency or for debt repayments (unless it adopts a stabilization mechanism like dollar-backed WBTC).
- Ethereum:
- Flexible and programmable: Can be used to create stablecoins or complex payment systems.
- Stablecoins:
- Stablecoins like USDT or USDC: Backed by the dollar, but dependent on the U.S. financial system (risk if the U.S. restricts access to them).
- Non-dollar stablecoins: Such as Libra/Diem (stopped) or other projects backed by commodities or various currencies.
- Central Bank Digital Currencies (CBDCs):
- Digital yuan (China) or digital euro: Could become alternatives if adopted by countries as reserves, but they are subject to their governments' control.
### 3. Main challenges for any alternative digital currency:
- Global acceptance: Needs international agreements and support from entities like the IMF.
- Infrastructure: Most countries do not have payment systems compatible with digital currencies.
- Sovereignty: Countries may refuse to adopt a foreign currency (digital or otherwise) for fear of losing monetary control.
### 4. Are there hybrid solutions?
- Digital currency basket: Platforms may emerge that use multiple currencies (like XRP for fast bank transfers + stablecoins).
- International barter system: Like the BRICS system which may develop a currency backed by gold or real resources.
### Conclusion:
- Pi Network is currently not ready to replace the dollar due to lack of adoption and stability.
- The most realistic alternatives are non-dollar stablecoins, or CBDCs from major countries (like China), or a basket of digital currencies backed by commodities.
- The political problem is bigger than the technical one: Any alternative needs a geopolitical alliance to support it (like the BRICS+ group), otherwise the dollar will remain dominant despite all criticisms.
The transition will not happen overnight, but the crisis you describe could accelerate the innovation of parallel financial systems outside of U.S. dominance.
