FX.co ★ Bitcoin acts as ‘check and balance’ on dollar in times of uncertainty, Coinbase CEO says

According to Coinbase CEO Brian Armstrong, Bitcoin helps the US dollar retain its reserve currency status by serving as a “check and balance” during times of economic uncertainty. Some investors shift into Bitcoin when budget deficits widen, inflation rises, and other stressors hit. In his view, this movement disciplines monetary policy and reduces the risk of a loss of confidence in the greenback.

Armstrong emphasized the importance of balancing inflation with US economic growth. He described an inflation rate of 2-3% as acceptable when accompanied by comparable GDP growth but warned that inflation outpacing growth would raise the risk of the dollar losing its reserve status. Such an outcome, he suggested, would be a serious blow to the American economy.

Armstrong also said that the first cryptocurrency “keeps the dollar in check” by creating an alternative that limits the scope for Federal Reserve and regulatory decisions that could undermine trust in the US economy. “In a strange way, Bitcoin is helping extend the American experiment,” he concluded. The head of Coinbase previously argued that the first cryptocurrency is a more practical investment than gold due to its divisibility. He also did not rule out the possibility of the cryptocurrency one day serving as a reserve asset for governments.