China has been at the forefront of next technologies, including cryptocurrencies and its underlying blockchain technology. As such, the nation is trying to leverage crypto and blockchain to combat the United States dollar. According to the CEO of PayPal, China might be looking use it as a financial weapon against the U.S.
Speaking at a virtual event organized by the Richard Nixon Foundation, Paypal CEO Peter Thiel said Bitcoin can be leveraged by China as a tool to beat the United States in the modern day fintech race. A feat that could very well be achieved considering the properties of cryptocurrencies to counteract the hegemonic power of the dollar.
“Even though I’m sort of a pro-crypto, pro-Bitcoin maximalist person, I do wonder whether at this point Bitcoin should also be thought in part of as a Chinese financial weapon against the U.S.”
Thiel explained that cryptocurrencies were developed to act as a threat to fiat like the U.S. dollar, and hence called forth U.S. strategists to take Bitcoin-related developments more seriously when studying the international geopolitical landscape.
U.S. and China
However, he added that Bitcoin might not be the only weapon that China is eyeing. The existence of the Euro, according to the CEO, could play a major role in destabilizing the U.S. Dollar’s position as the world reserve currency.
“From China’s point of view, they don’t like the U.S. having this reserve currency, because it gives us a lot of leverage over things like the oil supply chain and things like that. They don’t want the Renminbi to become a reserve currency because then you have to open your capital account and do all sorts of things they really don’t want to do. I think the Euro you could think it is in part a Chinese weapon against the dollar”.
Talking about China’s CBDC, referred to as the DECP, Thiel noted it cannot be compared with the usual cryptocurrency, while calling it a “totalitarian measuring device.”
In response to former CIA director Michael Pompeo, Thiel explained that China hasn’t made many advances when it comes to blockchain development. However, if the nation reaches a position of parity with the United States from a technological point of view, the later would be at a disadvantage.
As of now, technology plays a significant part when it comes to dominating world finance. As previously reported by The Daily Chain, The United States National Security Council (NSC) named DLT as one of the most critical focus areas for the nation to maintain technological dominance against China and Russia in a report last year.