• Billionaire venture capitalist Peter Thiel poses the question of whether Bitcoin will be used by China as a financial weapon.
  • This comes at a time where China is rolling out its digital yuan.
  • Thiel believes that China would want two global reserve currencies, neither being the US dollar. 

Peter Thiel, founder of PayPal and Palantir, recently urged the United States government to have a tighter grasp of cryptocurrency regulations in the country. 

Bitcoin is likely to serve as a functional reserve currency

Speaking at a virtual event for the conservative Nixon Seminar, Thiel, a pro-Bitcoin maximalist, opined on whether China would win a financial arms race with the United States

He further posed the question of whether Bitcoin should be “thought of in part as a Chinese financial weapon against the US.” 

The billionaire venture capitalist said China would want to see two global reserve currencies, rather than the US dollar being the default reserve currency. According to Thiel, China is not aiming for its national currency to fill that role but rather to turn another currency into a weapon against the dollar — Bitcoin. China previously tried and failed at this attempt with another currency — the euro

This comes at a time where the world’s second-largest economy is about to expect its own central bank digital currency, the digital yuan. When asked by the moderator whether China’s plan of a digital yuan would be a threat to the dollar, Thiel responded that since it is issued by the country’s central bank, it was “some sort of a totalitarian measuring device. The billionaire dismissed the digital yuan, emphasizing that it is not “a real cryptocurrency.”

Fears over China’s assumed control over Bitcoin continues to loom. Another major concern is that Bitcoin is more likely to serve as a functional reserve currency, said Thiel. If the greenback becomes less dominant, the less affected China is by the monetary and foreign policies in the US. Thiel explained:

It threatens fiat money, but it especially threatens the US dollar. If China’s long Bitcoin, perhaps from a geopolitical perspective, the US should be asking some tougher questions about exactly how that works.

During the virtual seminar, former Secretary of State Mike Pompeo agreed that the digital yuan “has a huge impact” on China’s surveillance capacity and that it could also enable the bypass of US sanctions. 

US is falling behind on crypto regulations

Securities & Exchange Commission (SEC) Commissioner Hester Peirce warned that the US is falling behind other countries in issuing a regulatory framework for blockchain and cryptocurrencies. She stated:

I think we’re certainly falling behind the curve. We’ve seen other countries take a more productive approach to regulating crypto. Our approach has been to say no and tell people to wait… we need to build a framework that is appropriate for this industry.

For entrepreneurs in the country to better understand cryptocurrency-related regulatory policies, she hopes that Congress will step in to “draw some lines.”

In light of China’s rollout of its digital yuan, Peirce further addressed the issue of a central bank digital currency in the US, as the Federal Reserve is investigating the possibility of issuing a digital dollar


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms

Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms

Bitcoin price teased its all-time high of $73,777 last week but declined to trade below $69,000 on Monday. Analysts suggest that market volatility is expected to rise as the US presidential election approaches.

More Bitcoin News
Litecoin poised for double-digit decline after breaking ascending trendline

Litecoin poised for double-digit decline after breaking ascending trendline

Litecoin breaks and closes below an ascending trendline, signaling a change in market structure. On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.

More Litecoin News
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced resistance at crucial levels ahead of the US Elections, leading to a price decline. As of Monday, they neared key support levels, and a firm close below these marks could signal further declines.

More Cryptocurrencies News
21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC

21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC

21Shares filed an S-1 registration with the Securities and Exchange Commission (SEC) on Friday for an XRP exchange-traded fund (ETF). While the chance of approval is slim with the current SEC administration, the landscape could change after the upcoming elections.

More Cryptocurrencies News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP