For decades, the U.S. dollar has amplified American power by fueling the economy, strengthening the military, and giving unmatched global influence. But today, the dollar’s dominance is being challenged in a new arena: digital assets.
The country that leads in digital assets will shape how money moves, how sanctions are enforced, and how global power is projected. But while Washington debates, Beijing is executing a long-term strategy.
China’s dual-track digital strategy
The Chinese Communist Party (CCP) has rolled out its digital yuan to expand influence abroad and build payment systems that bypass the U.S.-led financial order. At the same time, China remains deeply embedded in the crypto ecosystem, dominating mining hardware supply chains and maintaining the second-largest state-held bitcoin reserve.
That dual-track strategy is what makes China so dangerous. The CCP is pushing a centralized digital currency designed for surveillance and control while also stockpiling bitcoin, a decentralized system it cannot fully control but can heavily influence. If China shapes both systems, it gains leverage no matter which direction the global financial system evolves.
That’s why the U.S. cannot afford to treat bitcoin like a financial sideshow.
Bitcoin as a national security tool
Bitcoin is more than just a currency. It sits at the center of a paradigm shift in national security that the U.S. military is moving to capitalize on. When Secretary of War Pete Hegseth was asked whether bitcoin could project power and secure an advantage against China’s digital authoritarianism, his answer during a congressional hearing was direct: “Yes and yes.” While many department-wide initiatives remain classified, Hegseth confirmed that operational efforts are underway.
U.S. Indo-Pacific Commander Admiral Samuel Paparo also testified that bitcoin can be leveraged as a tool of power projection. He revealed the military has already deployed a live node on the Bitcoin network for operational testing. Bitcoin can potentially strengthen cyber defenses by replacing soft code with hard physics, according to Major Jason Lowery. The Pentagon is currently researching how bitcoin can be used toward that end.
The strategic bitcoin reserve
President Trump announced plans to establish the Strategic Bitcoin Reserve, recognizing bitcoin as a permanent national asset and positioning America as the country with the largest state-held bitcoin reserve in the world. But to win this race, the U.S. must ensure it dominates the infrastructure behind digital assets. That means securing the mining capacity and computing power needed to protect these networks. It means creating clear, pro-innovation rules so investment, talent, and development stay in America. It also means rapidly integrating digital assets into broader national security and economic strategy.
Critics claim bitcoin is too volatile and too risky. That thinking may be outdated. Gold has fluctuated for decades yet remains a cornerstone of global reserves. Bitcoin’s scarcity and decentralized design make it a powerful complement to traditional assets. And while bad actors have abused digital assets, blockchain technology has made it easier for law enforcement to track and disrupt illicit activity.
The real threat is not bitcoin itself but letting adversaries define its future. Failure to act could cede the future of financial power to the CCP, which uses technology to surveil, coerce, and control. But if the U.S. leads, it can shape a system rooted in free markets, innovation, and individual liberty that reinforces America’s global position.
For centuries, global influence has been dominated by whoever controls the backbone of money. The future is technology-driven, and the contest for global influence is headed toward a digital battleground. The United States does not get to choose whether this race happens—only whether it wins.
