Bitcoin Reinforces the US Dollar’s Reserve Status in an Unlikely Way, Says Coinbase CEO

Bitcoin as a Market Check on US Fiscal Policy

Bitcoin may be doing more to support the US dollar than undermine it, according to Coinbase CEO Brian Armstrong, who argues that Bitcoin introduces healthy competition that encourages fiscal discipline and helps preserve confidence in the dollar.

Speaking on the Tetragrammation podcast with Rick Rubin on Thursday, Armstrong said Bitcoin functions as an alternative escape valve during periods of economic stress—pressuring policymakers to avoid excessive inflation or unchecked deficit spending.

“Bitcoin provides a check and balance on the dollar,” Armstrong said, explaining that capital tends to flow into Bitcoin when confidence in monetary policy weakens.

He added that moderate inflation can be manageable when economic growth keeps pace, but persistent imbalance risks eroding the dollar’s role as the world’s reserve currency.

“If inflation outstrips the growth of the economy, you’ll eventually lose reserve currency status—and that would be a massive blow to the United States.”

Bitcoin’s Role in Preserving Confidence

Armstrong argued that Bitcoin indirectly reinforces the US financial system by serving as a benchmark that policymakers must account for.

is currently trading near $90,187, and while its volatility remains a defining feature, Armstrong believes its existence incentivizes the Federal Reserve and regulators to maintain credibility.

“In a strange way, Bitcoin is helping extend the American experiment,” Armstrong concluded.

The full remarks were shared by Armstrong on X:

🔗 https://x.com/brian_armstrong/status/2005399228173140204

Rising US Debt Adds Weight to Bitcoin’s Narrative

Armstrong’s comments come as concerns over US fiscal sustainability continue to mount. According to the US Congress Joint Economic Committee’s debt dashboard, national debt has reached approximately $37.65 trillion and is increasing by roughly $70,843 per second—or more than $6 billion per day.

Against this backdrop, Bitcoin and gold have increasingly been framed as hedges against currency debasement. In early October, JPMorgan described both assets as part of the so-called “debasement trade”, driven by uncertainty around the long-term stability of fiat currencies.

Bitcoin surged to an all-time high of $126,080 on Oct. 10, before retracing roughly 30% to around $88,210. Gold, meanwhile, has continued to climb, reaching a new high of $4,545 per ounce on Friday.

Strategic Bitcoin Reserve Still Limited in Scope

The policy landscape has also shifted. In March, the Trump administration signed an executive order establishing a Strategic Bitcoin Reserve (SBR), a move some US Senators argued could help offset long-term debt risks.

However, the reserve currently consists only of seized Bitcoin, with no active purchasing program. The proposed Bitcoin Act of 2025, which would formalize and expand the reserve, remains in the early stages of consideration in Congress.

Stablecoins Seen as a Stronger Tool for Dollar Dominance

While Armstrong sees Bitcoin as a supporting force for the dollar, other industry leaders believe stablecoins may play an even more direct role in preserving US currency dominance.

Polygon Foundation CEO Sandeep Nailwal has argued that dollar-backed stablecoins are driving a new phase of global dollarization by embedding the US dollar into digital economies worldwide.

“Dollarisation 2.0 is happening in real time—from Latin America to Africa,” Nailwal said, noting that entire economies are increasingly built around digital dollars.

A related post highlighting this trend can be found here:

🔗 https://x.com/antoniogm/status/1939810804137972154

The US has also moved to solidify its position through regulation. The GENIUS Act, passed in mid-July, is widely viewed as one of the most comprehensive stablecoin frameworks to date.

The stablecoin market currently stands at approximately $312.6 billion, and the US Treasury estimated in April that it could grow to $2 trillion by 2028.

Conclusion: Competition May Strengthen, Not Weaken, the Dollar

Rather than threatening the dollar’s dominance, Bitcoin may be reinforcing it by forcing policymakers to remain disciplined in an increasingly competitive global monetary environment. Combined with the rapid expansion of dollar-backed stablecoins, digital assets could paradoxically help secure the dollar’s role at the center of the global financial system.

As Armstrong suggests, the future of US monetary leadership may depend less on suppressing alternatives—and more on coexisting with them.

See all our insights: Bitcoin World News