U.S. warns of losing bitcoin race to China

For decades, the U.S. dollar has amplified American power by fueling the economy, strengthening the military, and giving unmatched global influence. But today, that 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. While Washington debates, Beijing is executing a long-term strategy.

China’s dual-track strategy

The Chinese Communist Party has rolled out its digital yuan to expand influence abroad and build payment systems that can bypass the U.S.-led financial order. At the same time, China remains deeply embedded in the crypto ecosystem. It dominates mining hardware supply chains and maintains the second-largest state-held bitcoin reserve.

That dual-track strategy is what makes China so dangerous, according to some analysts. The CCP is pushing a centralized digital currency designed for surveillance and control. It is also stockpiling bitcoin, a decentralized system it cannot fully control but can heavily influence. If China can shape both systems, it gains leverage no matter which direction the global financial system evolves.

Bitcoin as a national security tool

Bitcoin is more than just a currency. It is 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 can be used to project power and secure an advantage against China’s digital authoritarianism, his answer during a congressional hearing last month was direct: “Yes and yes.” Hegseth confirmed that operational efforts are underway, though many remain classified.

U.S. Indo-Pacific Commander Admiral Samuel Paparo also testified that bitcoin can be leveraged as a tool of power projection. He revealed that the military has already deployed a live node on the Bitcoin network for operational testing. According to Major Jason Lowery, bitcoin can potentially strengthen cyber defenses by replacing soft code with hard physics. The Pentagon is currently researching how bitcoin can be used toward that end.

Trump’s strategic bitcoin reserve

President Trump announced plans to establish the Strategic Bitcoin Reserve, recognizing bitcoin as a permanent national asset. This positions America as the country with the largest state-held bitcoin reserve in the world. But to win this race, the United States must dominate 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. And it means rapidly integrating digital assets into the broader national security and economic strategy.

Addressing the critics

Critics claim bitcoin is too volatile and too risky. But 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 actually 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 doesn’t get to choose whether this race happens, only whether it wins it.

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