PayPal founder Peter Thiel calls bitcoin a ‘Chinese financial weapon’


PayPal founder and Donald Trump loyalist Peter Thiel has claimed that China is using bitcoin as a “financial weapon” to undermine the US dollar.

Speaking at a virtual panel event for the Richard Nixon Foundation this week, the billionaire said bitcoin posed a threat to traditional fiat currency and that it “especially threatens the US dollar”.

Mr Thiel also said he is a “bitcoin maximalist”, meaning he believes the cryptocurrency is superior to all other alternative digital currencies like ethereum (ether) or litecoin.

However, he questioned China’s involvement in bitcoin, where around two thirds of all cryptocurrency mining takes place.

“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,” he said.

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“Even though I’m a pro-crypto, pro-bitcoin maximalist person, I do wonder whether at this point, bitcoin should also be thought [of] in part as a Chinese financial weapon against the US.

“From a geo-political perspective, the US should be asking some tougher questions about exactly how that works.”

Mr Thiel also said that China’s efforts to launch its own state-backed digital currency was “not a real cryptocurrency”, adding, “that’s just some sort of totalitarian measuring device”.

China first began exploring the possibility of creating its own cryptocurrency in 2014, while simultaneously cracking down on bitcoin exchanges and trading activity in the country.

A new law passed last year signalled a U-turn in China’s approach towards cryptocurrency, and paved the way for the launch of a digital yuan controlled by its central bank.

“This is a clear signal that the leader of the world’s second-largest economy is moving towards embracing the technology – in which bitcoin plays a vital part – and therefore taken as a positive boost for the whole digital currencies sector,” Nigel Green, CEO of financial advisory firm deVere Group, told The Independent at the time.

The digital yuan will streamline payments in the world’s second largest economy, however privacy advocates have also warned that it will also offer the state an unprecedented view into its citizens’ spending habits.

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