Peter Thiel: Bitcoin Could Be 'Chinese Financial Weapon'

By Jeff Benson

PayPal co-founder and venture capitalist Peter Thiel, speaking at a virtual event for the conservative Nixon Seminar on Wednesday, opined on whether China is poised to win a financial arms raise with the United States.

The weapon Thiel says China is using? Bitcoin.

"Even though I'm sort of a pro-crypto, pro-Bitcoin maximalist," Thiel said. "I do wonder 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."

The question Thiel was ostensibly answering wasn't about Bitcoin per se, but about China's plan to create a digital yuan. Moderator Hugh Hewitt wanted to know if the digital yuan is a "threat to the dollar and its dominance of world markets."

Thiel's view is that it isn't; he dismissed the coin, which would be issued by China's central bank, as "some sort of a totalitarian measuring device."

The real concern, Thiel said, is Bitcoin, because it's more likely to serve as a functional reserve currency. The less dominant the dollar is, the less effected it is by American monetary and foreign policy.

"If China’s long Bitcoin, then perhaps from a geopolitical perspective the U.S. should be asking some tougher questions about exactly how that works," he said.

The seminar, titled "Big Tech and China: What Do We Need from Silicon Valley?," also included former Secretary of State Mike Pompeo and former National Security Advisor Robert O'Brien.

Pompeo agreed that a digital yuan "has a huge impact for [China's] surveillance capacity," though he seemed to assert that such a coin itself would also allow it to make cross-border transactions that could skirt US sanctions: "They want to make sure that when Secretary Pompeo issues sanctions against the Iranian leadership, that there is a way to purchase Iranian oil."

Thiel has invested in multiple crypto ventures including Bitcoin mining company Layer1 Technologies and blockchain development platform Alchemy.

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