Peter Thiel sees Bitcoin as China’s financial weapon

Rick Steves

“Even though I’m a pro-crypto, pro-Bitcoin maximalist person, I do wonder whether if at this point, Bitcoin should also be thought of in part as a Chinese financial weapon against the U.S. where it threatens fiat money, but it especially threatens the U.S. dollar.”

Peter Thiel

Peter Thiel, the PayPal co-founder and venture capitalist who has become a “Bitcoin maximalist” in his own words, is worried that China may be supporting Bitcoin as a tool against the foreign and monetary policy of the United States.

Mr. Thiel spoke at a virtual event hosted by conservative non-profit, the Richard Nixon Foundation. There, he was asked to comment on China’s central bank digital currency (CBDC) as a potential threat to the US dollar status as a global reserve currency.

“From China’s point of view, they don’t like the U.S. having this reserve currency, because it gives a lot of leverage over oil supply chains and all sorts of things like that”, he said, adding that an “internal stablecoin in China” will amount to little more than “some sort of totalitarian measuring device”.

The venture capitalist stated that China probably does not want the attention that the renminbi would get as a global reserve currency. That would require the government to “open their capital accounts” among other measures “they really don’t want to do.”

In his perspective, China’s threat to the US dollar would come in the form of Bitcoin. “Even though I’m a pro-crypto, pro-Bitcoin maximalist person, I do wonder whether if at this point, Bitcoin should also be thought of in part as a Chinese financial weapon against the U.S. where it threatens fiat money, but it especially threatens the U.S. dollar.”

“China wants to do things to weaken [the US dollar]… China’s long Bitcoin, and perhaps, from a geopolitical perspective, the U.S. should be asking some tougher questions about exactly how that works”, Mr. Thiel said.

Supporting Bitcoin offers China a means to weaken the dollar’s international status and will probably have greater success than the country’s attempt to undermine the USD by denominating oil trades in Euros in recent years.

In 2020, the People’s Bank of China made the public its intention to overtake other countries and be the first to issue its digital currency (CBDC).

In what is viewed by many, including Peter Thiel, as a draconian effort to control the spending habits and investment opportunities of the population, China’s central bank added the right to issue digital assets will become a “new battlefield” between states. Winning the race will allow China to strengthen the yuan’s position on the world stage and break the dollar’s dominance.

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” the bank said in a statement, adding that China also needs to establish a new payment system network to break the dollar monopoly as a key part of the yuan internationalization.

Read this next

Institutional FX

Euronext reports double-digit growth in FX volume

Pan-European exchange, Euronext has reported a 10 percent rebound in the average daily volume on its spot foreign exchange market. The ADV figure stood at $19.6 billion in January 2022, which is up from December’s $18 billion.

Digital Assets

Voyager subpoenas FTX’s inner circle over Alameda loan

Bankrupt crypto broker Voyager Digital, represented by law firm Kirkland & Ellis, is seeking court approval to subpoena Sam Bankman-Fried’s inner circle, as well as Alameda Research’s former executives.

Retail FX

AvaTrade seals sponsorship deal with F1’s Aston Martin team

Dublin-based forex broker AvaTrade today announced that it has concluded a sponsorship deal with Formula One’s Aston Martin Cognizant team that entails sponsorship rights and other marketing benefits.

Executive Moves

M4Markets onboards Invaxa CEO Marios Antoniou as COO

Seychelles-regulated brokerage firm M4Markets has appointed Marios Antoniou, who has a colorful career within the foreign exchange industry, in the capacity of its Chief Operations Officer.

Digital Assets

GK8 now allows clients to control their digital assets as they would their fiat

“As the institutional market is increasingly turning to self custody, our policy engine empowers them to automate transactions, approvals, and even crucial workflows, while providing the highest degree of security, consistency, governance and control.”

Digital Assets

Retail CBDCs in the UK: “Welcomed” by CryptoUK and R3, but “Dystopian” for ETC Group

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified”, said the BoE and HM Treasury.

Institutional FX

Centroid taps Iress API to provide retail brokers with real-time market data

“It has always been a challenge to have an efficient, elegant solution for market data and order execution for retail brokers, but with Iress we have found absolutely the right partner to add to our client offering.”

Digital Assets

Ramp launches FCA-approved off-ramp product, onboards Brave, Trust Wallet, Ledger

“To obtain and maintain our FCA registration, we must meet and operate within their strict anti-money laundering and counter-terrorist financing standards. This is a huge achievement for us, as compliance is a cornerstone of our business and what we stand for.”

Institutional FX

State Street launches FIX API for Fund Connect ETF platform

“Expanding from proprietary APIs to the FIX industry standard will bring us closer to our goal of 100% digital interactions. This is another example of innovations we’ve brought to our operating model as we celebrate 30 years of servicing ETFs since the launch of SPY.”

<