Itâs no secret that the major nemesis of the United States, China, has been experimenting with crypto technology as it looks to render its economy free of the U.S sanctions and the USDâs hegemony. Speaking at a virtual event for the Nixon Seminar, PayPal co-founder and early investor Peter Thiel noted the lengths to which China could be going to make this a reality. According to Thiel, China may be using bitcoin as its weapon of choice.
âEven though I’m sort of a pro-crypto, pro-Bitcoin maximalist, I do wonder 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.”
The question that he was answering wasnât exactly about the worldâs largest and oldest cryptocurrency, but about China exploring the development of its own state-backed crypto â the digital yuan. The interviewer was quizzed on whether the imminent Chinese Central Bank Digital Currency (CBDC) poses a risk to the U.S. dollar.
Thiel espoused the view that the digital yuan is not a threat. He believes that the digital yuan which will be under the absolute control of the nationâs central bank will, in reality, give the state âa totalitarian measuring device.â
The real concern, per Thiel, is bitcoin because it has the potential to serve as the global reserve currency. In essence, the cryptocurrencyâs fundamental and technical qualities are blossoming, making a strong case for it to replace the dollar as the worldâs reserve currency.
Under such circumstances, Thiel asserts that: âIf Chinaâs long Bitcoin, then perhaps from a geopolitical perspective the U.S. should be asking some tougher questions about exactly how that works.â
Billionaire tech tycoon Peter Thiel has been a long-standing bitcoin proponent. In October 2019, he invested $50 million in Texas-based bitcoin startup firm Layer1 to negate Chinaâs supremacy in the mining sector.