Coinbase CEO: America's massive issuance of treasury bonds will be a major blow to the financial system

Crypto exchange Coinbase CEO Brian Armstrong said on Twitter that the massive issuance of US treasury bonds would be a major blow to the financial system.

This week the US Congressional Budget Office (CBO) released a new study showing that the number of US Treasury bonds issued will soar to $31.4 trillion over the next ten years. Armstrong tweeted the study and suggested “considering cryptocurrencies,” which he believes will be a major blow to the financial system and make cryptocurrencies more robust than the dollar.

Armstrong mentioned, “Cryptocurrency is considered a real currency that cannot be tampered with; at least its control is decentralized, and people can censor open source code. Why should your labor income be manipulated or devalued?”

According to CBO research, $31.4 trillion in debt would be the highest level since World War II, equivalent to 98% of the US GDP. CBO chief Phillip Swagel said during the House Budget Committee hearing on Wednesday that there is still time to deal with fiscal challenges, but treasury bonds are now on an unsustainable path.

According to the study, this level of debt would dampen economic output. Rising interest costs associated with debt will increase interest payments to foreign debt holders, thereby reducing the income of American households. A sharp increase in federal borrowing would also increase the risk of a fiscal crisis. Additionally, it may limit lawmakers' ability to adopt fiscal policies to respond to unforeseen events or use them for other purposes, and some negative economic and financial impacts will also be more likely to occur.

Armstrong believes it's only a matter of time before people begin to realize the reason for the dollar's depreciation, a fundamental shift in the way people think about cryptocurrencies.

He said, “Most people today probably still view cryptocurrencies as speculative assets. But I'm sure we'll see this perspective shift, and many things may start with young people, in which case holding government fiat money would be seen as ridiculous.”

Photo Credit: Coinbase

Author Xiu MU

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