In an interview with CNBC, Jeremy Siegel, a Wharton School professor and chief economist at investment management firm WisdomTree, shared that bitcoin could become a serious competitor with the U.S. dollar as the world's reserve currency, according to TheStreet.

What's happening? 

While discussing the GENIUS Act, which became law in July after bipartisan support to develop a stablecoin regulatory framework in the United States, Siegel proclaimed that "bitcoin itself is a threat to the dollar as a reserve currency."

At the same time, he remarked that the legislative branch's recent push to regulate digital assets could be "important catalysts" for the industry and that last-minute additions to the bill could help advance cryptocurrency's status, TheStreet detailed.

Siegel added that there is a larger shift happening in global finance wherein the speed and ease of crypto-based systems break down barriers such as borders and time zones for efficient international monetary transfers.

This opens up an opportunity for BRICS nations — an informal grouping of emerging economies that includes Brazil, Russia, India, China, and South Africa — to create a rival system.

"I didn't think the BRICS were really any threat at all, but the opponent actually has a chance," Siegel told CNBC.

Why is bitcoin's role so important?

The increase in bitcoin and cryptocurrency mining operations is not only a threat to the U.S. dollar's lead role in world economics — the expansion of these operations also has massive impacts on energy use, the environment, and consumer electricity bills. 

A University of Cambridge report revealed that the annual electricity consumption from bitcoin operations is 138 terawatt-hours, which is around 0.5% of the world's energy consumption.

However, it also noted that these operations, which need massive amounts of power to handle complex computations and cool down servers, are also driving the adoption of more sustainable energy sources. 

While the GENIUS Act is said to require a comprehensive regulatory framework for stablecoins to improve transaction monitoring and support compliance, Sen. Elizabeth Warren saw many problems with the bill, according to TheStreet.

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Warren shared that it could pave the way for the White House to become a "Trump casino." Warren has also accused the administration, whose actions have reportedly played a role in sinking the dollar's value by 9.7% this year through tariffs and policy unpredictability, of weakening consumer protections. 

She added that the bill could also allow private technology companies to develop their own digital currencies, analyze the transactions, and crush small competitors while opening the door for sanctions evasion and helping gangs import fentanyl to the U.S.

While the U.S. dollar is still the world's reserve currency because it is used in most of the world's trade and finance, the decentralized nature of bitcoin and digital currencies could threaten its standing as global trade partners see the dollar as less important, TheStreet concluded. 

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