Billionaire investor Ray Dalio has described fiat currency as being in serious jeopardy

Ray Dalio, a billionaire investor, has said that fiat money is under "jeopardy" as an effective store of wealth, but he does not think that Bitcoin (BTC) and stablecoins will be the answer to the problem.

On February 2, the founder of the hedge fund firm Bridgewater Associates appeared on CNBC's Squawk Box to discuss his concerns regarding the "effective money" status of the United States dollar and other reserve currencies as a result of the massive amount of money that has been printed using these currencies.

"We live in a world where the form of money that we are used to is under peril. We are creating too much money, and it's not just the United States doing it; it's all of the reserve currencies."

Nevertheless, Dalio was quick to add his opinion on whether Bitcoin was a viable answer to the problem, noting that despite everything it has done in "12 years," it is still too unpredictable to function as money:

"This is not going to be a productive use of money. It does not function very well as a means of storing riches. "He claimed that it is not a viable medium of trade since it is not efficient.

Stablecoins, which are replicas of state-backed fiat currency, were another kind of cryptocurrency that he thought was ineffective as a form of money.

Instead, Dalio recommended the introduction of a "inflation-linked currency," which would help customers preserve their purchasing power in the face of rising prices.

"The item that comes the closest to that is something called an inflation index bond," he said. "However, if you developed a coin that says OK, this is purchasing power that I know I can save in and put my money in over a period of time and trade in everywhere, I believe that would be a terrific coin."

"Therefore, I believe that you are going to witness the creation of currencies that you have not seen before and that most likely will end up becoming coins that are both beautiful and viable. He continued by saying, "I don't believe Bitcoin is the answer."

On the other hand, Dalio's assessment of Bitcoin and the practicality of an inflation-linked currency did not get widespread support from the financial community.