I asked the Chinese artificial intelligence this:
The American 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 US policies, he will restrict dollar access to these countries, drying up its sources, which will create a severe economic crisis for countries since most central reserves are in dollars, and will negatively impact external debt repayments on both donors and beneficiaries. Can a digital currency like Pi Network be the global financial alternative, and why? Are there other digital currencies that can be fully prepared for that?
And he answered:
The situation you describe relates to the US imposing strict tariff policies and threatening to restrict the dollar from countries that do not comply with its policies, an action that could create economic crises due to the dollar's dominance in global reserves and external debt repayments. Here comes 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: it is not recognized by governments or central banks as legal tender.
- Stability: no guarantee of its value or central control (like stablecoins backed by assets).
- Technology: It 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 prepared digital alternatives?
- Bitcoin:
- Most widespread: has broad acceptance and strong infrastructure.
- Volatility issue: 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 they rely on the US financial system (risk if the US restricts access to them).
- Non-dollar stablecoins: like Libra/Diem (paused) or other projects backed by commodities or various currencies.
- Central bank digital currencies (CBDCs):
- Digital yuan (China) or digital euro: may become alternatives if adopted by countries as reserves, but they are subject to their governments' control.
### 3. Major challenges for any alternative digital currency:
- Global acceptance: needs international agreements and support from entities like the IMF.
- Infrastructure: most countries lack 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?
- Basket of digital currencies: platforms may emerge using multiple currencies (like XRP for fast bank transfers + stablecoins).
- International barter system: like the BRICS system that 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 for major countries (like China), or a basket of digital currencies backed by commodities.
- The political problem is greater 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 shift will not happen overnight, but the crisis you describe may accelerate the innovation of parallel financial systems outside American hegemony.
