Bitcoin Provides 'Check and Balance' on US Dollar, Helps Preserve Reserve Status, Says Coinbase CEO

Bitcoin as a Check on Fiscal Policy

Bitcoin is helping reinforce the US dollar's reserve currency status by acting as a market check on excessive inflation and deficit spending, according to Coinbase CEO Brian Armstrong. In an interview on Tetragrammation with Rick Rubin on Thursday, Armstrong claimed that Bitcoin provides healthy competition for the US dollar, which in turn pressures policymakers to maintain fiscal discipline.^[1]

"[Bitcoin] provides a check and balance on the dollar in the sense of if there's too much deficit spending or inflation in the US, people will flee to Bitcoin in times of uncertainty," Armstrong said in the interview.^[1]

The Coinbase CEO argued that while moderate inflation may be acceptable when aligned with economic growth, excessive inflation poses serious risks. "It might be okay to have 2-3% inflation if the economy is growing at 2-3% but if inflation outstrips the growth of the economy, you'll eventually lose the reserve currency status, and that would be a massive blow to the United States," he explained.^[1]

Armstrong concluded that Bitcoin indirectly keeps the dollar in check by ensuring the Federal Reserve and financial regulators avoid actions that could undermine confidence in the US economy. "So I actually think in a strange way, Bitcoin is helping extend the American experiment," he said.^[1]

US National Debt Spiraling Higher

Armstrong's remarks come as the US national debt continues its dramatic ascent. According to the US Congress Joint Economic Committee's debt dashboard, US national debt has reached $37.65 trillion and is now rising by $70,843 per second — or nearly $4.25 million per minute.^[1]

Separate data from USDebtClock.org shows the US national debt stands at over $38.538 trillion as of 2:02 a.m. EST, with the deficit growing by $69,433.37 per second for the past year as of December 17. The combined publicly-held and intragovernmental debt is rising nearly $6 billion per day.^[2]

Bitcoin and Gold as 'Debasement Trade'

In early October, JPMorgan touted Bitcoin and gold as the "debasement trade" amid increased uncertainty in the dollar.^[1][2] Bitcoin soared to a $126,080 high on October 10 but has since retraced 30% to $88,210.^[1] From another perspective, BTC managed to reach a new all-time high above $126K on October 6, but has since corrected more than 29%.^[2]

Meanwhile, gold has continued its upward trajectory, setting its latest high of $4,545 per ounce on Friday.^[1]

Strategic Bitcoin Reserve Remains in Early Stages

The Trump administration signed an executive order to establish a Strategic Bitcoin Reserve in March, a move several US Senators said could mitigate the nation's mounting debt.^[1] However, the reserve currently stockpiles seized Bitcoin without purchasing any, and the Bitcoin Act of 2025 bill — which purports to support the Strategic Bitcoin Reserve — is still in the early legislative stages in Congress.^[1]

Stablecoins and Dollar Dominance

Other industry observers argue that stablecoins have a bigger role in cementing the US dollar's status as the reserve currency than Bitcoin. Polygon Foundation CEO Sandeep Nailwal said last month that in addition to creating strong demand for US debt, stablecoins are pushing the US dollar into the hands of individuals and businesses worldwide.^[1]

"Dollarisation 2.0 is happening in real time — from LatAm to Africa, entire economies are being rewired around digital dollars," Nailwal stated.^[1]

Contrarian View from Gold Advocate

Gold investor and Bitcoin critic Peter Schiff offered a contrasting perspective in a December 26 post on X, predicting that gold will take the throne from the US dollar as the "primary central bank reserve asset."^[2]

"That means the U.S. dollar will crash against other fiat currencies, and America's free ride on the global gravy train will end. Prepare for a historic economic collapse," Schiff warned.^[2]