- Bitcoin’s move above $40,000 reignites discussion on its place in the financial order.
- Crypto advocates predict Bitcoin will do away with fiat money.
- Brian Armstrong sees Bitcoin and fiat as complementary forces rather than adversarial.
Bitcoin’s limited supply has led some of its most ardent supporters to predict it will eventually supplant inflation-prone fiat currencies. But Coinbase CEO Brian Armstrong is forecasting a more nuanced future, where Bitcoin and government-backed fiat “co-exist for a long time,” with cryptocurrency even “extending western civilization.”
Bitcoin Complements Fiat
In a recent tweet, Armstrong laid out his future vision of the global financial system in which Bitcoin and the dollar “co-exist” as complementary forces that interact to extend US hegemony. Highlighting the problem of inflated money supply and debt-fueled spending, Armstrong posits that more individuals view cryptocurrencies as an “antidote” to the problem, spurring them to buy digital currencies accordingly.
Armstrong foresees that the resultant increased crypto inflows will act as a natural check and balance that will complement the dollar rather than lead to “an either-or situation,” as Bitcoin maximalists foreshadow. His reasoning on this matter boils down to the path of least resistance being a move from dollars to crypto, particularly as the biggest stablecoins are dollar-backed rather than to another country or region’s fiat.
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While Armstrong’s vision offers comfort for those who fear massive geopolitical upheaval, some would argue that the days of US hegemony are already numbered.
Rise of the BRICs
As US hegemony shows signs of fraying, the ascent of BRICS presents a formidable challenge to dollar dominance. With China and India boasting the world’s second and fifth-largest economies and Russia and Brazil ranking in the top twenty, the bloc wields tremendous economic might. This is now being leveraged via pacts transitioning towards local currency settlement between BRICS members.
Beyond BRICS, even key US allies like Saudi Arabia grow wary of overreliance on an increasingly weaponized dollar system. While the petrodollar has come to symbolize America’s influence over the rest of the world, there is growing talk of oil exporters contemplating settlement in yuan.
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As nations explore ways to circumvent dollar dependency, it accelerates the transition towards a more balanced multi-currency order where greenback privileges face increased competition, including from Bitcoin.
On the Flipside
- No single currency represents BRICS members, making the dollar dominant for the foreseeable future.
- US political leaders such as Treasury Secretary Janet Yellen disagree with Armstrong‘s take on BTC–fiat coexistence.
- A return to gold-backed currency would represent more familiar ground to those opposed to BTC.
Why This Matters
Armstrong’s comments lend fresh momentum to the narrative of cryptocurrencies peacefully integrating with traditional finance rather than usurping it. As debates rage around crypto’s challenges to the establishment, his stance bolsters hopes for a more collaborative paradigm between the emerging and old guard.
Learn more about the bullish market setup forming for Bitcoin here:
Bitcoin Breaks 2023 Peak to Liquidate Bears Across the Board
Read about Bitcoin’s ETF FOMO-induced rally past $42,000 here:
Bitcoin Surges Past $42k as ETF FOMO Kicks In
