Source: Adobe/Rob Byron
Washington has received yet another warning about the dangers of inertia in the bitcoin (BTC) sphere, with a leading investment guru and political donor claiming that the United States could be neglecting the token at its own peril – and playing directly into Beijing’s hands.
Speaking at a virtual roundtable event arranged by the Richard Nixon Foundation, the Palantir CEO and founder Peter Thiel suggested that China may be taking a “long bitcoin,” strategy – and if that were the case if “from a geopolitical perspective,” Washington “should be asking some tougher questions about exactly how that works.”
Theil, who is also the co-founder of PayPal, stated at the event,
“I do wonder whether at this point, bitcoin should also be thought [of] in part as a Chinese financial weapon against the United States. [BTC] threatens fiat money, but it especially threatens the dollar.”
Thiel noted that he was “a pro-crypto, pro-bitcoin maximalist person” during his speech. But he also took a sideswipe at China’s forthcoming digital yuan launch, remarking,
“Some internal stablecoin in China – that’s not a real cryptocurrency. That’s just some sort of a totalitarian measuring device.”
He also claimed that other fiats like the euro were also part of the Chinese “weaponry” in its struggle to knock the dollar off its perch.
“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. They […] they don’t want the renminbi to become [the global] reserve currency, because then you have to open your capital account and you have to do all sorts of things they really don’t want to do. I think the euro […] is in part a Chinese weapon against the dollar.”
“Even though I’m a pro-crypto, pro-Bitcoin maximalist person, I do wonder whether if at this point Bitcoin should a… https://t.co/scKtMSxbdu
— Richard Nixon Foundation (@nixonfoundation)
In the crypto community, reactions were mixed, with some interpreting Thiel’s remarks as meaning he advocated a crackdown on BTC in the USA as a means of bolstering the dollar. But others claimed that Theil was actually calling for the opposite: a Washington-led push toward BTC that could pre-empt China’s “weaponization” of the token.
Bitcoiner Stephen Cole opined,
“The best way to protect yourself against your enemies being long bitcoin is for you to go even longer bitcoin.”
Others, such as the ex-chief technology officer of Coinbase and former General Partner at Andreessen Horowitz Balaji Srinivasan, thought that some commentators had misinterpreted Thiel’s remarks, and wrote that they were made “jokingly” and were part of an “obvious rhetorical overstatement, meant to poke the US for [its] complacency on innovation.”
Marc van der Chijs, entrepreneur, crypto-focused venture capitalist, and co-founder of VC firm First Block Capital, wrote,
“Peter Thiel is not saying that BTC should be banned or restricted, but he is actually indirectly pushing the US to adopt it more quickly. If not the US falls behind even more, […the] dollar is doomed anyway. […] This is very bullish for BTC.”
The Three Arrows Capital CEO Zhu Su noted that the comments showed just how far BTC has come, with the token no longer being compared to “tulips” or falling into “speculative mania,” instead developing “geopolitical and civilizational significance” that would make it and “pivotal in the rise and fall of fortunes and empires.”
And this, wrote Dominik Weil, the head of the BitcoinVN exchange, was the kind of spirit early BTC players were discussing back in 2010 on the old Bitcointalk forums.
Thomas Kuhn, a Bitcoin writer, opined that the greenback “has become a tool of centralized power in stagnant and degenerative socio-cultural conditions” and suggested that Western values have long pushed in the direction of “avoiding the natural concentration of power.”
Thiel’s warnings – tongue-in-cheek or not – are by no means the first along these lines. And daresay they will likely not be the last. The European Central Bank last year mentioned the possibility of “currency wars” in the digital financial era.
And China has been very open about its own intentions to break dollar dominance – as has Russia in more recent weeks.
And while some are skeptical about China’s chances of success, others are not so sure that perceived American dilly-dallying will pay off.
Some have claimed that a post-dollar world could be dominated by the digital CNY, with experts claiming that even a digital dollar might not provide an adequate solution.
And others still claim that it will be crypto – not central bank-run digital initiatives – that will ultimately decide the fate of the dollar.
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