Peter Thiel sees Bitcoin as China’s financial weapon
“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, 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.