Could the Cryptocurrency Bitcoin Someday Dominate the Use of the U.S. Dollar?
The skyrocketing US national debt, now standing at $37 trillion, has sparked concerns about economic stability. These fears have led Coinbase CEO Brian Armstrong to bring attention to the debt crisis, suggesting Bitcoin could potentially replace the US dollar in the long run.
In a post on social media platform X, Armstrong called on the U.S. Congress to take immediate action. He emphasized that Bitcoin is crucial, particularly for the US, and urged a fix for the nation's monetary system.
Budget Battle in Congress
Armstrong's declaration comes at a time when Congress is trying to push a Trump-backed spending plan through the House of Representatives. This plan includes extending tax cuts, boosting defense spending, and making substantial cuts to Medicaid, food assistance, and clean energy programs.
Critics argue that this plan could further strain the US economy. In fact, a group of six Nobel laureate economists, including Paul Krugman and Joseph Stiglitz, warned in an open letter last month that if this plan becomes permanent, public debt could increase by an additional $3 trillion.
A New Safe Haven for Investors
As the US grapples with rising debt levels and economic uncertainty, Bitcoin's allure has grown among corporate investors. Originally created in 2008 as a limited supply digital alternative to fiat currencies, Bitcoin is now seen as a safe haven.
Even Tesla CEO Elon Musk has weighed in, criticizing the spending package, calling it "full of pork and disgusting."
Contemplating a Bitcoin Reserve
Some politicians are looking at more extreme solutions to the debt crisis. In 2020, Wyoming Senator Cynthia Lummis proposed a bill to designate Bitcoin as a strategic reserve asset.
The bill, which resurfaced after Donald Trump's election victory, suggests that the U.S. Treasury should gradually purchase approximately 1 million Bitcoin, equivalent to about 5% of its total supply. The reserves would be held in secure, decentralized wallets and funded with existing Treasury assets.
Senator Lummis believes a Bitcoin reserve could help stabilize the dollar and shield American citizens from long-term inflation. She describes cryptocurrency as a "modern store of value" and urges bold steps to secure economic stability.
Trump's earlier pledge to "make the US the global center of cryptocurrency" seems to be gaining traction, with the likelihood of Bitcoin playing a more active role in the country's economy increasing daily.
State-Level Bitcoin Initiatives
On the state level, initiatives to establish Bitcoin reserves are also underway. For instance, New Hampshire became the first US state to legally establish a Strategic Bitcoin Reserve when Governor Kelly Ayotte signed HB 302 into law in May 2025. This state-led initiative authorizes the holding of Bitcoin as part of its investment strategy, mirroring traditional reserve assets like gold but leveraging Bitcoin's unique properties.
Texas is also progressing with Senate Bill 21 (SB 21), which aims to create the Texas Strategic Bitcoin Reserve. This fund, managed by the Texas Comptroller of Public Accounts, would allow the state to purchase, hold, and manage Bitcoin using public funds. Only cryptocurrencies with an average market capitalization of at least $500 billion over the past year would qualify, ensuring stability and reducing risk.
These state-level initiatives reflect a significant shift in the perception of Bitcoin as a strategic asset and a tool for financial management. By adopting Bitcoin, governments can foster innovation, bolster economic security, and position themselves as industry leaders in the digital asset sector 14.
- In the face of growing economic uncertainty and rising national debt, on social media platform X, Coinbase CEO Brian Armstrong emphasized that Bitcoin could be a pivotal solution for revamping the US monetary system, further stressing its importance, especially in times like these.
- As the US grapples with economic turmoil, technology such as Bitcoin has emerged as a potential ally for financial stability. As evidenced by initiatives in states like New Hampshire and Texas, where legislation is being proposed for crypto reserves, Bitcoin is increasingly being viewed as a strategic asset and a tool for financial management.
