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Peter Thiel also asked the United States government to reconsider China’s partnership with Bitcoin from a diplomatic standpoint.
PayPal co-founder and venture capitalist Peter Thiel has cautioned that the Chinese central government might be using Bitcoin to sabotage US international and monetary policy.
However, he said, it has attempted to use the Euro in the same manner.
Thiel was speaking at a virtual event organised by the Richard Nixon Foundation, a conservative non-profit, about whether China’s central bank-issued digital currency, or CBDC, could challenge the US dollar’s status as a global reserve currency.
Although Thiel, who is considered to be pro-Bitcoin, believes that a “internal stablecoin in China” would be nothing more than “some kind of repressive measurement device,” he also believes that China may see Bitcoin as a weapon to erode the dollar’s hegemony:
“From China’s perspective, they don’t want the United States holding this reserve currency because it gives them a lot of control over oil supply chains and all kinds of stuff like that,” he said, adding:
“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.”
Thiel pointed to recent Chinese attempts to denominate oil trades in Euros in order to weaken the dollar’s global status, saying, “I think the Euro, you might think of as part of a Chinese tool against the dollar — the last decade didn’t really operate that way, but China would have liked to see two reserve currencies, like the Euro.”
The venture capitalist hypothesised that China would not want its renminbi to become the world’s reserve currency, adding that the government will have to “share their capital markets,” among other steps “they just don’t want to do.”
As a result, Thiel believes that promoting Bitcoin provides China with an elegant way to undermine the dollar’s foreign standing:
“China wants to do things to weaken [the 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.”