Peter Thiel, the co-creator of PayPal and a fund manager, has cautioned that the Chinese national government might be promoting Bitcoin as a way to weaken US international and monetary policy.
However, he went on to say that it had attempted to use the Euro in the same manner.
Thiel was talking at an online event organized by the Richard Nixon Foundation, a conservative non-profit, about whether China’s national bank-issued virtual money, or CBDC, could jeopardize the dollar’s role as a world store of value.
Although Thiel, a proven proponent of Bitcoin, believes that a internal cryptocurrency in China” will lead to nothing more than some kind of authoritarian measurement instrument, he also believes that China may see Bitcoin as a weapon to upend the dollar’s dominance:
He stated that, “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 […] 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 Chinese attempts in previous time to revalue oil transactions in Euros in order to weaken the dollar’s international status, saying: “I think the Euro, you can think of as part of a Chinese weapon against the dollar — the last decade didn’t really work that way, but China would have liked to see two reserve currencies, like the Euro.”
The fund manager hypothesized that China would not want the renminbi to become the world’s store of value, adding that the authority will have to enable their capital accounts and take other steps that they just don’t want to take.
As a result, Thiel believes that promoting Bitcoin provides China with an effective way to undermine the dollar’s foreign position:
“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.”
