Ray Dalio warns U.S. debt and tariffs may open door to replace dollar as global reserve asset

Ray Dalio thinks 2026 is the year the dollar finally cracks and loses its world reserve currency. Wonder what could replace it? Perhaps the world’s current best-performing currency; the Russian ruble.

Back in April 2025, Ray warned that the global monetary system was starting to break. At the time, the U.S. national debt was already above $36 trillion, and Uncle Sam was neck-deep, drowning in interest rate payments on the debt.

The warning came before markets fully reacted. Since then, pressure has built from every direction. U.S. debt has kept rising. Trade tensions have not cooled, thanks to Mr. Donald Trump.

Ray Dalio links US national debt stress to gold and crypto demand

In an interview with the Financial Times, Ray was asked if deregulation threatened the dollar’s reserve role. He said no. He pointed instead to debt. “I do see the dollar and the other reserve currency governments’ bad debt situations as threatening to their appeals as reserve currencies and storeholds of wealth,” Ray said. He added that this is what has been pushing gold and cryptocurrency prices higher.

Ray was also asked about stablecoins holding U.S. Treasuries. He said he did not see that as a systemic risk. “I don’t think so,” he said. But he did flag a separate issue. “I see a fall in the real purchasing power of Treasuries as being a real risk.” He said stablecoins should avoid wider problems if they are well regulated.

When asked if crypto could replace the dollar, Ray said crypto now works as an alternative currency. “Crypto is now an alternative currency that has its supply limited,” he said. He explained that if dollar supply rises or demand drops, crypto becomes more attractive.

He also said most fiat currencies with large debts struggle to store value. Ray pointed to history. He said this played out in the 1930s and 1940s and again in the 1970s and 1980s.

Sanctions and market stress push dollar’s reserve status doubts deeper

Gold and silver prices have both hit record highs as the U.S. dollar weakened. David Wilson from BNP Paribas spoke to Bloomberg about the gold rally. He said gold at $5,000 per ounce once sounded extreme. “It looked like a big target,” David said. He added that it is now within sight.

Bitcoin has sadly not shared that momentum. Traders are betting price weakness continues. Geopolitical tension is hurting risk appetite. Nic Puckrin from Coin Bureau said pressure could remain. “From here, it’s likely we’ll see further downside unless buyers step in,” Nic said. He pointed to strong support near $88,000. He also said fears tied to Greenland could get worse before easing.

VanEck tied the reserve currency debate to earlier crises. The firm said concern became real after repeated monetary and fiscal support during the global financial crisis. It intensified after the U.S. sanctioned Russia’s central bank reserves. VanEck said this forced a rethink of what reserve assets actually mean.

They said they began reviewing this issue in August 2012 after studying the financial crisis in detail. At the time, the crisis was described as a rare event. Later analysis showed deeper structural flaws. VanEck pointed to work by Laurence Kotlikoff and reporting by Mark Pittman and Bob Ivry, who sued the Federal Reserve for documents and won.

VanEck said the Fed and Treasury backstopped the global system in 2008. The same approach returned during the 2020 lockdowns. That confirmed monetary support was no longer temporary.

Sanctions added urgency. Freezing central bank reserves raised the risk of total asset loss driven by politics. Economists described that move as a form of default.

VanEck said this is the opposite of what reserve managers want. Sanctions were imposed by countries with heavy financing needs, showing how far policymakers are willing to go. That shift pushed gold higher again. For reserve managers, doubts around the dollar are no longer theoretical.

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