High profile Silicon Valley venture capitalist Peter Thiel suggested during a virtual seminar that China may use bitcoin as a weapon against the US dollar, Business Insider reports.
“Even though I’m a pro-crypto, pro-bitcoin maximalist person, I do wonder whether at this point bitcoin should also be thought of in part as a Chinese financial weapon against the US,” he said during the Richard Nixon Foundation seminar this week. “It threatens fiat money, but it especially threatens the US dollar and China wants to do things to weaken it.”
The US dollar has long been the reserve currency of choice around the globe, undermining China’s position in global markets.
“From China’s point of view… they don’t like the US having this reserve currency, because it gives us a lot of leverage over Iranian oil supply chains and all sorts of things like that,” Thiel said.
Thiel also criticized the new digital currency established by China is a “totalitarian measuring device” instead of an actual cryptocurrency like bitcoin.
The “digital yuan” known as the Central Bank Digital Currency (CBDC), was trialed last month in Beijing, Suzhou, and Shenzen. About $6 million worth was handed out in a trial in Chengdu, China, to 50,000 applicants, as CNBC reported earlier this year.
Shark Tank star Kevin O’Leary has recently struck a similar tone as Thiel, announcing this week he will only buy “clean” bitcoins and not “blood coins” from China.
Despite his criticisms, Thiel still believes that the US should consider adopting more crypto technologies.
US policymakers and investors are becoming increasingly worried that international moves to establish centralized digital currencies could end up undermining the dominance of the US dollar.
But with “financial weapons” aimed at the US, China could soon move ahead, effectively weakening the US dollar. It will be up to lawmakers to ensure that the US markets stay relevant in a rapidly changing financial landscape.
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