AI and Crypto Redraw Global Finance

The dollar’s dominance has long defined global finance. Yet as central banks trial crypto and AI reshape cross-border settlement, the system faces its first true structural test in decades. This shift could redefine how global liquidity and trust are priced. IMF COFER data place the dollar’s share of global reserves at 56.32% in early 2025 — the lowest since the euro’s birth. Meanwhile, 94% of monetary authorities are testing central-bank digital currencies. That signals diversification and digitalization of state money.

AI’s arrival in financial infrastructure accelerates this shift. The Bank for International Settlements warns that autonomous trading and liquidity algorithms could magnify systemic risk. At the same time, new digital rails promise cheaper and faster transfers. Legacy networks built on the greenback are quietly eroding.

Indicators of a Permanent Shift in Dollar Dominance

BeInCrypto spoke with Dr. Alicia García-Herrero, Chief Economist for Asia-Pacific at Natixis and former IMF economist. Drawing on two decades of macro research, she explains how CBDCs, AI, and stablecoins may redraw global monetary power. She also outlines which metrics will reveal that pivot first.

The dollar still anchors reserves, yet erosion has begun. COFER data show a steady slide since 2000. The question is no longer whether alternatives arise, but when the shift becomes measurable — a timeline investors can now watch in real time.

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Her threshold — a drop below 55% by 2027 plus billion-dollar CBDC flows — would mark a turning point for reserve structures. It shows when diversification stops being theory and becomes policy.

Stablecoin Market Share and Emerging Bloc Risks

Stablecoins remain an extension of dollar liquidity. Around 99% of circulation is USD-pegged, with USDT and USDC dominant. Non-dollar or commodity-backed tokens could spark bloc-based competition — a clear sign that liquidity may fragment along political lines.

García-Herrero argues that a rival stablecoin must capture over 20% of global settlements to trigger true bloc fragmentation. That marks the point where digital currencies start redrawing geopolitics, not just payments.

On-chain settlement now tops $35 trillion annually — twice Visa’s throughput. Stablecore CEO Alex Treece calls it “a modern Eurodollar network” serving global USD demand beyond banks. It shows that digital rails still strengthen the dollar’s reach.

IMF data show these tokens already handle about 8% of GDP-scale flows in Latin America and Africa. That proves stablecoins now act as informal policy instruments.

Treece compares this digital-dollar system to the 1960s Eurodollar market, when offshore investors tapped US liquidity through parallel networks. Private innovation extended the dollar’s reach instead of replacing it.

Stablecoins in High-Inflation Economies

In inflation-hit economies like Argentina and Turkey, stablecoins serve as informal dollar rails. They act as a digital hedge against currency collapse and offer a parallel financial lifeline showing crypto’s real-world role.

Her rule of thumb: moderate use stabilizes. But when stablecoins exceed a quarter of payments, they threaten monetary sovereignty — the point where relief turns into risk.

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Tokenization and Sovereign Debt

Tokenization has become a key theme in finance, though sovereign uptake lags. While BIS pilots move slowly, private firms advance faster. Franklin Templeton expects early adoption in treasuries and ETFs in Hong Kong, Japan, and Singapore. These pilots show where regulation and innovation already meet.

CoinGecko data show tokenized treasuries above $5.5 billion and stablecoins over $220 billion. The concept is shifting from pilot to practice as traditional assets quietly migrate on-chain.

Her projection — 5% of sovereign issuance tokenized by 2028 — signals gradual reform led by Asia and Europe. It complements rather than replaces the dollar system. Digital finance often evolves through compliance, not rebellion.

Both public and private efforts are converging. García-Herrero expects regulator-led uptake, while Franklin Templeton bets on market pull. Either way, traditional assets are migrating to blockchain rails — one bond and one fund at a time.

China’s e-CNY and State-Led Crypto

China’s e-CNY continues to expand under tight central control. By mid-2025 it had handled 7 trillion yuan in transactions. This shows Beijing’s ability to digitize money without private crypto and how centralized ecosystems can scale quickly.

Study Times, the Central Party School’s journal, frames crypto and CBDCs as tools of “financial mobilization.” Beijing’s digital yuan and blockchain networks serve as strategic assets for liquidity control and sanction resilience — a “digital logistics front” merging finance and security.

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She defines state-led dominance as private blockchain investment under 10% of fintech inflows. That level may arrive by late 2026, when digital sovereignty becomes measurable, not rhetorical.

Russia–China Trade and the “State-Led Web3 Bloc”

Facing sanctions, Russia and China now settle most trade outside the dollar system. Their digital-asset experiments raise the question of when coordination becomes a formal bloc — a turning point that could reshape settlement geography.

Her 50% benchmark defines the threshold for a new clearing sphere. It could stabilize sanctioned trade yet deepen global fragmentation.

Europe has already reacted. The EU’s recent ban on a ruble-backed stablecoin, A7A5, marked its first direct crypto sanction. It showed how digital assets have become both weapon and target in financial conflict.

Proof of Personhood and Financial Inclusion

Proof-of-Personhood systems like Worldcoin’s biometric model are reframing debates on identity and inclusion. Their economic value remains unproven, yet scalability could shape how fast AI-age trust frameworks evolve.

The debate mirrors the wider digital-identity race. TFH’s Adrian Ludwig sees proof-of-human systems as a trust layer for an AI age. García-Herrero says only measurable impact will prove their worth.

AI and Crypto Cross-Border Trade Dominance

AI-driven finance now shapes liquidity, compliance, and settlement. The BIS says machine-learning copilots already automate AML reviews. Project Pine smart contracts let central banks adjust collateral in real time, signaling programmable compliance’s rise.

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BIS frames this as a programmable yet regulated financial core. Speculative outlooks like AI 2027 imagine AI systems directing liquidity, R&D, markets, and security policy. BIS calls for integrity-by-design before such systems fully emerge.

Investments nearing $100 billion by 2027 favor that model. Stablecoins may serve as compliant, tokenized layers linking automated liquidity to programmable money — the next battleground for regulators.

Sovereign Bitcoin Reserves and Resource Bottlenecks

Bitcoin’s share in sovereign reserves remains small yet symbolic. Its link to risk assets and reliance on energy and chips may create new geopolitical choke points. Digital reserves could soon tie to physical supply chains.

Meanwhile, digital-asset treasury (DAT) firms manage over $100 billion in crypto, revealing how fragile balance sheets can mirror sovereign risk. Bitcoin-focused treasuries with strict liquidity buffers appear most resilient — a preview of challenges nations may face as adoption rises.

Transparency of Crypto and Governance Advantage

Public blockchains are entering government registries and procurement systems. For democracies, transparent ledgers offer accountability that directly strengthens fiscal credibility.

Her 15–20% benchmark marks the point when blockchain adoption becomes structural. It raises transparency scores and gives open societies a governance advantage.

Conclusion

Across ten domains — CBDCs, AI, stablecoins, tokenization, and blockchain — García-Herrero’s framework suggests evolution, not revolution. The dollar’s reach is diffusing, not disappearing, as digital money turns monetary power into a shared, data-driven system.

Her analysis grounds speculation in measurable data: reserve ratios, settlement flows, and adoption thresholds. The future monetary order will hinge less on disruption than on governance — how transparency, trust, and control align in the digital age.