Is Crypto Bad for the Deficit? The Hidden Costs You Could End Up Paying
As the U.S. national debt surpasses $36 trillion and deficit spending fuels concerns about inflation, some policymakers and analysts have wondered: Does cryptocurrency exacerbate the deficit problem?
“Since crypto can generate incomes, and often very large incomes, for people in the industry, without producing any actually useful product, we should see it as a potential source of inflation similar to large budget deficits,” Dean Baker, senior economist at the Center for Economic and Policy Research, wrote in June.
Still, the issue isn’t simple. From bitcoin’s effect on fiscal policy to stablecoins’ surprising support for U.S. debt, the real costs and benefits of crypto adoption are more complex than many headlines suggest.
