Industry News US Billionaire warns of China Weaponizing Bitcoin

US Billionaire warns of China Weaponizing Bitcoin

April 13, 2021

The 2020/2021 crypto bull run is still going strong. As mid-April comes close, so do the chances that the next set of crypto record prices will be set with bitcoin token price, but also ethereum and likely many other altcoins. With that rise in prices, the ever-widening narrative in the general public and mass media is also gaining traction. On one hand, people like Elon Musk appear to be relentless supporters of the cryptocurrency domain – his company Tesla Motors taking on bitcoin payments shows that this is not just hot air. He is not alone in this field, with numerous others from the business domain taking the opportunity to talk about the potential of crypto investment.

However, on the other hand, there are also those who are hostile or at least cautious about the same ecosystem, both in terms of finance but also global security on all levels. One of these is Peter Thiel, another vocal billionaire from the tech industry. He recently warned the US that bitcoin is not just volatile and open to unprecedented turbulence. Thiel also said that in the right circumstances, China, the global adversary, and competitor to the US, could use bitcoin as a weapon. The same decision and subsequent developments could end up causing a lot of lasting damage in the US.

Cost of Inaction

The role of bitcoin is constantly evolving. Recent comments from Peter Thiel show that the same evolution now encompasses also geopolitical strategy and how it is perceived in the everyday news media. Thiel, an outspoken conservative political supporter in the US, gave a talk at the Richard Nixon Foundation. During that talk, he warned that the cost of inaction on the part of the US when it comes to digital currencies, especially the biggest one of them all, could be staggering if China decided to use it in a form of geopolitical weapon.

He also underlined two big narratives that are currently taking place together in the same space. According to Thiel, whose current net worth is estimated at 4.9 billion USD, these narratives are not only important to the US planners and political decision-makers but also to all investors looking to get into crypto. He believes that these macro factors will definitely impact their crypto investment returns, but also where and how they keep doing business is Beijing really does utilize its unique position in the cryptocurrency structures to deal damage to the USA.

Treat to Fiat

Thiel showcased his thoughts on this matter by saying that maybe more people and institutions should perceive bitcoin as a financial weapon China is using – or could use – against the US. More precisely, he believes that crypto is a threat to fiat money and especially to the USD. However, this flat-out statement has a lot of layers connected to it. One of them is that on the surface, the idea Thiel presents might sound like a call for the US regulators to stop BTC tokens and their use from becoming a bigger threat to the USD. That process is taking place through the simple act of BTC adoption which is underway across the globe, including the US. With platforms like Robinhood and Cash App, purchasing cryptocurrency has never been easier and so is keeping hold of any digital assets a person might have.

Previously, only a couple of years ago, people had to learn how to create a digital wallet on some third-party platform and then send money from it to the same crypto vault. Now, however, the same procedure is streamlined almost beyond recognition thanks to the cutting-edge financial services that offer the same abilities. Other platforms, like PayPal, are also deep in the same process already, rolling out crypto support to their clients across the globe, including both ordinary users and merchants. So, stopping that process of bitcoin proliferation would include, on the regulatory side, stopping the ease with which adoption took place.

Statement Interpretations

Some were quick to discard the concept that Thiel is presenting in his statement. That is further underlined by his political affiliation as well as the dealings with the media, where he almost single-handedly supported the legal battle that destroyed one media outlet, the Gawker. However, others are pointing out that the underlying interpretation of his words is more relevant to crypto and more supportive of it than it might first seem.

The third trajectory of explanation is about his business objectives and where these might lead if he too decided to enter the crypto market. In any case, the notion that bitcoin can indeed change the world became more prevalent in 2013 when its first general price growth began to show itself on a global scale. Now, whatever else he might be saying, Thiel is also saying that the expansion of bitcoin could eventually lead the USD into the position of having a rival as the world’s second global currency.

Loss of Positions

With or without the phenomena of crypto, the world is very much changing and doing so at a drastic speed. The fears about the loss of the US position are not a hypothetical moment, but something that is actively taking place. Numerous countries are not taking on bitcoin to replace USD. Instead, they are reaching for other means of holding value like gold. Buying gold is the predominant action many central banks across the planet are presently engaged in or are at least expanding plans for. Here, things like esports and financial technology can show everyone just how important it is to hedge your bets. So, taking on bitcoin makes as much sense as taking on more gold.

Most banks are still far away from that position but the same does not apply to the precious metal. Yet, it would be hard to argue that gold wants to be weaponized or that China plans to weaponize this metal and use it against the US. An identical narrative applies to bitcoin, mainly because simply said the same cryptocurrency network does not care who and why use it. It also never plays games of geopolitical maneuvering. That is why it is good that the US, just like any other country in the world, considers how to stay safe and how to protect its national currency. But, the threats it might face can rarely be something that it simply isolates from itself either to regulation or any other means.

Source: Coindesk