Bitcoin Is Quietly Policing U.S. Fiscal Policy, Coinbase CEO Says

Coinbase CEO Brian Armstrong says Bitcoin is playing a constructive role in the global financial system by pressuring U.S. policymakers to maintain fiscal discipline, a dynamic he argues ultimately supports the dollar’s long-term credibility rather than undermining it.

Speaking on the Tetragrammaton podcast with Rick Rubin, Armstrong said Bitcoin offers investors an alternative when confidence in traditional monetary policy weakens. During periods of rising deficits or persistent inflation, that alternative becomes increasingly relevant.

“Bitcoin provides a check and balance on the dollar,” Armstrong said, describing the asset as a signal to policymakers that capital has options beyond fiat currencies. 

In his view, the presence of that alternative indirectly restrains policy excesses by encouraging governments and central banks to protect confidence in the broader economic system.

Inflation, Growth, And Reserve Currency Risk

Armstrong stressed that inflation alone does not necessarily threaten reserve currency status. The real danger, he said, emerges when inflation persistently outpaces economic growth. In that scenario, confidence in a currency erodes over time.

“If inflation outstrips growth, you’ll eventually lose reserve currency status,” Armstrong said, describing such an outcome as a severe blow to the United States. 

He added that Bitcoin’s existence acts as a market-based warning system, reflecting waning confidence before those risks fully materialize.

That dynamic, Armstrong argued, creates an incentive for policymakers to course-correct. 

“In a strange way, Bitcoin is helping extend the American experiment,” he said, framing the asset as a pressure valve rather than a direct challenger to the dollar.

Also read: America’s $1 Trillion Interest Bill: The Debt Service Era Has Officially Begun

Mounting Debt And Investor Behavior

The comments come as fiscal pressures intensify in Washington. U.S. national debt has climbed to roughly $37.65 trillion and continues to grow at a rapid pace, according to data from the U.S. Congress Joint Economic Committee. The scale of borrowing has renewed concerns about long-term dollar stability and debt sustainability.

US national debt (Source: USDebtClock)

Those concerns are increasingly visible in market behavior. In October, JPMorgan described Bitcoin and gold as part of a broader “debasement trade,” as investors positioned for potential currency weakness and policy uncertainty.

Bitcoin surged to a peak above $126,000 before pulling back roughly 30%, while gold continued to push to new record highs. 

The divergence highlighted how investors are balancing exposure between digital assets and traditional safe havens as fiscal risks grow more pronounced.

Washington’s Cautious Bitcoin Steps

U.S. policymakers have also begun to acknowledge Bitcoin’s role, albeit cautiously. 

In March, the Trump administration signed an executive order establishing a Strategic Bitcoin Reserve, though it currently consists only of seized assets. The proposal to formalize that reserve under the Bitcoin Act of 2025 remains in the early stages of debate in Congress.

While largely symbolic for now, the move marked a shift in tone, suggesting Bitcoin is increasingly viewed as a strategic asset rather than a purely speculative instrument.

Stablecoins And The Dollar’s Global Reach

Not everyone agrees that Bitcoin will be the primary force shaping the dollar’s future. 

Some industry leaders argue that stablecoins may do more to reinforce U.S. monetary dominance than Bitcoin itself.

Sandeep Nailwal, CEO of the Polygon Foundation, has said dollar-backed stablecoins are expanding demand for U.S. debt while extending the dollar’s reach into emerging markets. He has described the trend as “Dollarisation 2.0,” pointing to rapid adoption across Latin America and Africa.

The regulatory groundwork for that expansion is already taking shape. The U.S. passed the GENIUS Act in July, establishing one of the most comprehensive stablecoin frameworks to date and signaling official support for regulated, dollar-linked digital assets.

Schiff Predicts Gold Takes The Throne

A far more pessimistic view comes from gold investor and longtime Bitcoin critic Peter Schiff. 

In a Dec. 26 post on X, Schiff said the dollar’s reign as the world’s primary reserve currency may already be ending, predicting that gold will replace it as the dominant central bank reserve asset.

“That means the U.S. dollar will crash against other fiat currencies, and America’s free ride on the global gravy train will end,” Schiff wrote, warning of what he described as a looming historic economic collapse.

An Unsettled Outlook For 2026

Looking ahead to 2026, the industry remains divided. Strategy CEO Phong Le has argued that Bitcoin’s fundamentals held up throughout 2025 despite weaker prices, while Bitwise chief investment officer Matt Hougan has said he expects 2026 to be an “up year” for the asset.

For now, Bitcoin sits at the center of a broader debate over fiscal discipline, monetary credibility, and whether digital assets ultimately reinforce the dollar—or signal the beginning of a fundamental shift in the global financial order.