The article below was written by David Pan, a news reporter at CoinDesk. He previously worked at Fund Intelligence and interned at the Money Desk of USA Today and the Wall Street Journal. He does not hold investments in cryptocurrency.
Unfortunately, these days individuals are still using F.U.D. to get their point across, and I would think that anyone who is a HODLER of Bitcoin would refrain from saying anything negative about Bitcoin after Elon Musk’s words which probably caused Bitcoin to drop about $18,000 per coin.
As of the writing of my two cents, Bitcoin is down about $10,000 per coin from an all-time high of $64,536 per coin.
Peter Thiel is a Co-Founder of PayPal and PALANTIR. According to his own words, he is pro-crypto and pro-Bitcoin maximalist, and he may be right in one thing and that is Bitcoin is a threat to all FIAT CURRENCIES and not just the U.S. Dollar.
However, the dollar has more to lose when it comes to cryptocurrencies than any other FIAT CURRENCY because if it is knocked off its perch as the NUMBER ONE WORLD’S RESERVE CURRENCY, it could affect the U.S. and its power over the financial world.
Right now, the U.S. Dollar has two things going for it:
- It is the World’s Number ONE Reserve Currency.
- Every barrel of oil sold worldwide is sold in dollars.
Could Bitcoin Be Used as A Financial Weapon by China?
When countries start to use Bitcoin or other cryptocurrencies for trade or to buy oil, then the U.S. has a serious problem.
Or when countries develop their Central Bank Digital Currencies and stop using the U.S. Dollar for trade, then the U.S. will have to deal with the fallout!
Those days could be closer to happening than most want to think about, and the one thing that Bitcoin and other cryptocurrencies have bought about is the development of Central Bank Digital Currencies (CBDCs), and China has a head start in developing their CBDC.
China does have issues with the U.S. Dollar as the World’s Reserve Currency because it gives the U.S. too much power, and China would like to do anything that it can to change the balance of power.
Cryptocurrencies are not going away anytime soon, and as more institutional money flows into Bitcoin and other cryptocurrencies, chances are they will become another asset class,
The sooner you start your cryptocurrency education, the sooner you will be able to make an educated decision about “Could Bitcoin Be Used as A Financial Weapon by China?”
As always, conduct your own due diligence so that you make an educated decision instead of one based on emotions.
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US Policy Adviser Rebuts Peter Thiel: Bitcoin Won’t Undermine USD
One policymaker says China is unlikely to use bitcoin as a financial weapon against the U.S. dollar.
Peter Thiel said China could use bitcoin to destabilize the U.S. dollar, a view policy experts disagreed with Thursday.(John Lamparski/Getty Images)
Apr 16, 2021 at 12:55 p.m. EDTUpdated Apr 16, 2021 at 3:29 p.m. EDT
A member of a Congressional group tasked with looking at the national security implications of the U.S.’s economic relationship with China said Thursday that bitcoin (BTC, -14.14%) is no threat to the U.S. dollar, despite what Peter Thiel thinks.
Specifically, bitcoin does not compete effectively with fiat currencies because of its unstable price, said Alex Wong, a member of the U.S.-China Economic and Security Review Commission created by Congress in October to evaluate the U.S.-China relationship.
During its hearing, Thursday Wong made the comment after he asked an expert witness about the accuracy of Thiel’s recent claim that bitcoin would be a threat to the U.S. and that it would benefit Beijing.
“I think the characteristics that make bitcoin attractive make it not really competitive with fiat currencies because when you buy a bitcoin, you don’t really know it’s going to be twice as much or 20% less tomorrow,” Wong said. “It is extremely volatile.”
Yaya Fanusie, an adjunct senior fellow at the Center for a New American Security and the expert witness in question, responded that the American entrepreneur’s concerns are “overblown.”
Fanusie said Thiel was referring to the fact that computing power to mine bitcoin is heavily concentrated in China, so the country could be able to hold and control bitcoin. In reality, he claimed, that would not be an issue due to the bitcoin network’s decentralized nature.
Read More: Are 51% Attacks a Real Threat to Bitcoin?
“If there were ever a case where there was so much national security leverage there or disadvantage, it’s not like additional mining couldn’t be built outside of China,” Fanusie said.
Thiel, the co-founder of digital payment giant PayPal, a bitcoin maximalist and early backer of Ethereum, has been critical of American tech companies such as Facebook and Google for their ties to China. He also co-founded the technology firm Palantir in 2004, whose clients include the CIA and FBI intelligence agencies, according to TechCrunch.
Bitcoin is not as effective for busting sanctions as it appears and stablecoins are more likely to compete with fiat currencies in the future, according to Wong.
“It is less likely they compete with the U.S. dollar than it is to countries that have limited access to regular dollars and use stablecoins as the substitute,” Wong said of stablecoins. Meanwhile, the People’s Bank of China, the country’s central bank, has made it clear its planned digital yuan will be the one and only yuan-pegged stablecoin used in China.