Key Takeaways
- A top US commander’s remarks signal that Bitcoin is increasingly being viewed as a power projection tool.
- It comes as Bitcoin is being discussed as an apolitical alternative in a fragmenting financial system.
- Market implications remain mixed.
Bitcoin is emerging as more than a financial asset in US national security discussions, after a top US military commander described it as a potential tool for cyberdefense and power projection in testimony to Congress this week.
Admiral Samuel Paparo, head of US Indo-Pacific Command, told a Senate Armed Services Committee hearing on April 21 that Bitcoin could strengthen US capabilities in an era of intensifying competition with China, particularly in cyberspace and financial warfare.
The comments come as Bitcoin’s role in national security has been growing in relevance over the past few years, with some experts believing it is close to playing a potentially leading part.
Bitcoin as “Power Projection” Tool
Paparo’s comments came in response to Senator Tommy Tuberville, who asked how leadership in Bitcoin might affect US leverage, resilience and deterrence in competition with China.
“Our research into Bitcoin is as a computer science tool,” Paparo said.
He added that Bitcoin “shows incredible potential” because its proof-of-work system can impose real-world costs beyond traditional network security measures.
“Bitcoin is a reality. It is a valuable computer science tool as a power projection,” Paparo said, emphasizing applications “outside of the economic formulation.”
The admiral also described Bitcoin as a “peer-to-peer, zero-trust transfer of value,” claiming such systems could support “all instruments of national power.”
While Paparo did not provide specific policy recommendations, he said he would offer further detail for the record.
Bitcoin’s Military Trajectory
Paparo’s remarks reflect a broader shift in how the U.S. military and defense community view Bitcoin.
The US military has been exploring Bitcoin’s role as a tool since the early 2010s, with assessments mainly focused on how its used by adversaries for sanctions evasion and illicit financing.
US intelligence agencies have also monitored Bitcoin activity as early as 2013, while the Department of Defense explored blockchain technology through logistics.
By the late 2010s and early 2020s, analysis expanded to include both threats and opportunities.
A 2019 report for U.S. Special Operations Forces highlighted how states such as Iran and North Korea used crypto to bypass sanctions, while urging the US to develop its own expertise.
Real-world events have since accelerated this shift.
During Russia’s 2022 invasion of Ukraine, Kyiv raised more than $200 million in crypto donations, demonstrating how decentralized networks could rapidly fund military efforts across borders.
At the same time, academic work within the US defense ecosystem began reframing Bitcoin more positively.
A 2023 thesis by US Space Force Major Jason Lowery argued that proof-of-work systems could function as a form of “electro-cyber power projection,” enabling nations to impose energy-based costs in cyberspace.
Bitcoin’s Longstanding Military Push
As the push to use Bitcoin within military operations has been under discussion for several years, Special Operation figureheads have also had their eye on the asset.
In a 2022 Naval Postgraduate School report, security professional Michael C. Pero examined Bitcoin’s potential role within US Special Operations Command (USSOCOM).
He argued that early adoption could provide “a suite of tactical tools and options to counter Chinese expansion.”
Pero wrote that Bitcoin could “enable human intelligence operations” and “modernize frontline payment methods with the use of digital tokens and e-wallets.”
He noted that crypto could also address longstanding logistical challenges in unconventional warfare, where delivering financial support to partner forces has historically relied on slow methods.
Bitcoin and Financial Warfare
Paparo’s testimony has also drawn attention from commentators, some of whom have linked his remarks to recent US Treasury actions against Iran.
Treasury Secretary Scott Bessent said this month that sanctions under “Operation Economic Fury” aim to “systematically degrade Tehran’s ability to generate, move, and repatriate funds.”
The financial pressure was described as the “equivalent” of kinetic military activity.
Some commentators have contrasted that approach, which relies on control over traditional financial infrastructure, with Bitcoin’s decentralized design.
Adding that the “zero-trust” system could weaken the effectiveness of sanctions.
“When your enemies are adopting Bitcoin and your own generals are calling it a power projection tool, you don’t get to opt out. You can’t sanction your way around it,” Bitcoin Well wrote on X.
The commentator pointed to reports that sanctioned states, including Iran, have explored Bitcoin mining to bypass restrictions.
Adding: “The only move left is to accumulate faster than your adversary.”
However, it is important to note that the admiral focused primarily on Bitcoin’s technical properties and cybersecurity potential, rather than endorsing a whole scale shift away from existing financial tools.
Bitcoin’s “Safe Haven” Narrative Tested During Military Conflict
Recent market moves suggest investors are already reassessing Bitcoin’s role during geopolitical shocks.
Since US and Israeli airstrikes at the end of February, Bitcoin has risen, at times outperforming both traditional safe havens and risk assets over the same period.
Bitwise CIO Matt Hougan recently said this divergence shows a shift in how investors are viewing the crypto.
In a post on X on April 14, he argued that buyers are effectively making “two bets” — that Bitcoin will mature into a digital store of value competing with gold, and that it could eventually function as an apolitical currency.
He pointed to the growing “weaponization” of financial infrastructure, including Russia’s removal from the SWIFT network in 2022, as a turning point.
“I mused at the time that the weaponization of SWIFT might one day open up space for bitcoin,” Hougan wrote.
Adding: “If countries grew reluctant to deal in dollars, it stood to reason that they might prefer an apolitical alternative at some point.”
He added that the ongoing Iran conflict may be providing early evidence of that dynamic.
Geopolitical Currency?
Developments around the Strait of Hormuz illustrate how a use case for Bitcoin in geopolitical conflicts could emerge.
Earlier this month, Iran indicated it may impose a fee of roughly $1 per barrel on oil shipments passing through the strategic waterway, which handles about 20% of global oil flows — and they pledged having it paid in Bitcoin.
Based on pre-conflict volumes, such a toll could generate around $20 million per day.
At current prices, that would equate to roughly 280 Bitcoin daily, compared with about 450 BTC newly issued by the network each day.
That suggests a single geopolitical chokepoint could theoretically absorb a significant share of Bitcoin’s new supply.
Some analysts argued that this consideration was a major shift for Bitcoin’s role in the world.
Crypto author Jesse Tevelow said that even if Iran’s proposal is never implemented, it signals a shift in perception.
“Whether this proposal ultimately materializes or not is secondary. The signal itself is what matters,” he wrote on X.
Bitcoin in Future Military Use?
Whether Bitcoin will play a direct operational role in the US military remains uncertain.
To date, adoption has largely been exploratory, with limited evidence of widespread use for payments, logistics or mining within official military structures.
Most defense-related blockchain projects continue to rely on permissioned systems rather than public networks like Bitcoin.
While Paparo’s testimony suggests that at least some military leaders see value in Bitcoin’s underlying architecture, key questions remain on how governments could integrate decentralized systems into regulated defense frameworks.
In order to do this, governments would need to figure out how to manage volatility risks and security concerns tied to access.
Potential Impact on Bitcoin Price?
The growing association between Bitcoin and national security could have mixed implications for its market outlook.
On one hand, recognition by senior military officials may reinforce narratives of Bitcoin as a strategic asset, potentially pushing demand up.
The concept of a Strategic Bitcoin Reserve, for example, helps to aid the comparison to commodities like gold or oil.
However, closer ties to geopolitical competition and state actors could introduce new risks.
Increased regulation and nationalization pressures, which would be boosted by Bitcoin’s use in conflict scenarios, could affect investor sentiment negatively.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
