Brian Armstrong, the CEO of Coinbase, has referred to Bitcoin as a superior form of currency compared to gold, pointing out its scarcity, transportability, divisibility, usability, and performance.
Armstrong’s remarks came after South African Reserve Bank (SARB) Governor Lesetja Kganyago opposed the formation of a Strategic Bitcoin Reserve (SBR). Kganyago challenged the idea, questioning the strategic importance of Bitcoin as an asset held by the government.
Coinbase CEO on Bitcoin vs. Gold
In a recent message on X (previously known as Twitter), Armstrong elaborated on the benefits of Bitcoin in comparison to gold.
“Bitcoin serves as a more effective medium of exchange. It embodies the decentralization and scarcity characteristics of gold but boasts superior divisibility, portability, and (I believe) even fungibility. It’s notably more challenging to ascertain whether gold is pure, or if it has some lead embedded within the bar,” Armstrong stated.
He pointed out that Bitcoin’s market capitalization, approximately $2 trillion, is around 11% of gold’s market capitalization, which stands at about $18 trillion. The CEO expressed optimism that Bitcoin’s market value may exceed that of gold within the coming 5-10 years, ultimately positioning Bitcoin reserves as more substantial than gold reserves.
Thus, he suggested that nations with gold stocks should think about designating at least 11% of those assets to Bitcoin.
“If the US takes the initiative with a Strategic Bitcoin Reserve, I believe many of the G20 nations will follow suit,” he remarked.
His comprehensive post followed discussions at the World Economic Forum in Davos, where Kganyago voiced doubts about the idea of governments maintaining Bitcoin reserves.
The SARB governor rejected the idea of advocating for a specific asset without strategic reasoning. Additionally, Kganyago stressed gold’s historical role as a reliable store of value.
“Gold has a historical significance; there was once a gold standard, with currencies pegged to it. But if we now introduce Bitcoin, where does that leave platinum or coal? Why don’t we maintain strategic reserves of beef, mutton, or apples? Why specifically Bitcoin?” Kganyago queried.
He characterized the conversation as a public policy matter that necessitates a broader dialogue, cautioning against industries imposing their products on society.
In reply, Armstrong underscored Bitcoin’s performance history as the top-performing asset over the last decade. He stressed that governments ought to view Bitcoin as a store of value and gradually increase their holdings as time progresses.
“It may begin as merely 1% of their reserves, but over time, it will come to match or exceed gold reserves,” Armstrong proposed.
Meanwhile, the SBR continues to gain momentum. States such as Wyoming, Massachusetts, Oklahoma, and Texas have put forth legislation to adopt Bitcoin as a strategic asset.
Moreover, at least 15 states in the US, including Ohio and Pennsylvania, are actively exploring initiatives to set up Bitcoin reserves. President Donald Trump also enacted an executive order to create a “national digital asset stockpile.” This action has set the stage for a more structured approach to incorporating digital assets into the nation’s financial strategy.
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