Coinbase CEO: Stablecoins Give People a Way Out of High Inflation

Coinbase CEO Brian Armstrong says stablecoins are giving people in countries with high inflation a new way to protect their money without leaving their home countries or stockpiling physical cash.

Armstrong made the comments in a post on X on August 23, arguing that people living with unstable currencies have historically had limited options when the value of their local money declines.

“Crypto gives people a way out,” Armstrong wrote. He explained that people in countries facing high inflation or currency volatility previously had to consider moving abroad or holding large amounts of physical cash in an attempt to preserve their purchasing power.

According to Armstrong, stablecoins are changing that equation by allowing users to hold digital assets linked to stronger global currencies, particularly the U.S. dollar, from virtually anywhere.

Stablecoins are cryptocurrencies designed to maintain a relatively stable value by being linked to assets such as fiat currencies.

Dollar-backed stablecoins such as USDT and USDC are among the most widely used examples. Unlike Bitcoin and other highly volatile cryptocurrencies, their primary purpose is to maintain a value close to the currency they track.

For someone whose local currency is rapidly losing value, holding a dollar-linked stablecoin can provide another way to gain exposure to the dollar without physically keeping U.S. banknotes.

Armstrong’s comments reflect one of the arguments increasingly made by crypto advocates: digital currencies can provide financial options to people who have limited access to stable foreign currencies or international banking services.

Stablecoins are already being used for payments, transfers and savings in several emerging markets, where currency instability can make traditional financial transactions more difficult.

However, stablecoins are not completely risk-free. Their stability depends on the assets backing them and the ability of issuers to maintain their promised value. Users can also face regulatory, platform and counterparty risks.

Still, Armstrong believes the technology is opening a new door for people dealing with unstable monetary systems.