China using Bitcoin as ‘financial weapon’ against United States: Peter Thiel

Peter Thiel has urged the U.S. government to reappraise China’s relationship with Bitcoin from a geopolitical perspective.

PayPal co-founder and venture capitalist, Peter Thiel, has warned that the Chinese central government may be supporting Bitcoin as a means to undermine the foreign and monetary policy of the United States.

But, he added, it has tried to use the Euro the same way.

Speaking at a virtual event hosted by conservative non-profit, the Richard Nixon Foundation, Thiel was commenting on whether China’s central bank-issued digital currency, or CBDC, could threaten the U.S. dollar’s status as a global reserve currency.

While Thiel, who is known to be pro-Bitcoin, suggested an “internal stablecoin in China” will amount to little more than “some sort of totalitarian measuring device,” he added that China may view Bitcoin as a tool to erode the dollar’s hegemony:

“From China’s point of view, they don’t like the U.S. having this reserve currency, because it gives a lot of leverage over oil supply chains and all sorts of things like that,” he said, adding:

“Even though I’m a pro-crypto, pro-Bitcoin maximalist person, I do wonder whether 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.”

Thiel alluded to Chinese efforts to denominate oil trades in Euros during recent years in a bid to undermine the global standing of the dollar, stating: “I think the Euro, you can think of as part of a Chinese weapon against the dollar — the last decade didn’t really work that way, but China would have liked to see two reserve currencies, like the Euro.”

The venture capitalist speculated China does not actually want its renminbi to become the global reserve currency, noting the government would have to “open their capital accounts” among other measures “they really don’t want to do.”

As such, Thiel concludes that supporting Bitcoin offers China an elegant means to weaken the dollar’s standing internationally:

“China wants to do things to weaken [the dollar] — China’s long Bitcoin, and perhaps, from a geopolitical perspective, the U.S. should be asking some tougher questions about exactly how that works.”

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Onboarding Institutional Crypto Investors- Coinbase Helps Execute ‘One of the Largest Digital Asset Trades in History’

Onboarding Institutional Crypto Investors- Coinbase Helps Execute 'One of the Largest Digital Asset Trades in History'Over the last year, institutional investors have been flocking toward crypto assets like bitcoin and after Microstrategy’s initial bitcoin purchase, the trending institutional demand for crypto started swelling. On Tuesday, the San Francisco trading platform Coinbase published a study that details how the company helped the firm One River Asset Management make “one of the […]

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Crypto Economy Spikes More Than 11%, Entire Market Cap Captures Over $800 Billion

Crypto Economy Spikes More Than 11%, Entire Market Cap Captures Over $800 BillionDigital currency markets have seen decent gains this weekend as bitcoin touched another all-time high (ATH) on Saturday afternoon. Meanwhile, a number of other crypto assets have seen significant price rises as well, as the entire market capitalization of all 7,500+ digital currencies in existence is hovering above the $800 billion mark. The $800 Billion […]

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IMF Cautions Central Banks May Have to Rethink What Constitutes Reserves

The IMF warns that central banks may have to rethink what constitutes their reserve currency holdings. In a recent study, the global lender points to the changing geopolitical landscape, technological advances and the impact of the Covid-19 pandemic as events likely to influence the composition of reserves. Advances in Financial Technologies In addition to the […]

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Chinese residents make 20K transactions in digital yuan trial event

The numbers come following the Suzhou municipal government giving away roughly $3 million in a digital yuan lottery for residents.

People in China have conducted roughly 20,000 transactions through e-commerce company JD.com in a trial of the country’s digital yuan.

According to local media outlet Global Times, JD.com reported that 80% of participants born in the 1980s and 1990s used the platform to conduct transactions in the digital currency starting on Friday evening, with at least one transaction larger than $1,527.

The e-commerce site also reported the numbers as the city of Suzhou conducted a real-world trial for digital yuan at the “Double Twelve” shopping festival, in which 10,000 physical storefront locations participated.

The trial in Suzhou is one of many that may be conducted across China to test use cases for the central bank digital currency. The city’s municipal government reportedly gave away roughly 100,000 “red envelopes” — a traditional method of presenting gifts in China — containing $3 million in digital yuan in a lottery for residents. In October, the city of Shenzhen launched a similar pilot program to promote the digital currency with a public giveaway of $1.5 million to 50,000 lottery winners.

“In 2021, China will continue to look for more scenarios to test the digital yuan, but an extensive launch is still unlikely,” said Cao Yin, managing director of the Digital Renaissance Foundation in Shanghai. He added that the Chinese government would likely continue controlled trials until officials are certain the digital currency can be safely issued:

“We have only ourselves to compete with on this matter, and there’s no need to rush it.”

The People’s Bank of China launched the pilot programs for its digital yuan in April in Shenzhen, Chengdu, Suzhou and Xiongan. As of November, the programs had reportedly processed more than 4 million transactions, totaling roughly $300 million.

Since launching the digital yuan trials, the central bank has announced it would expand the number of testing cities to include Beijing and Tianjin as well as the surrounding province of Hebei. Cointelegraph reported in August that the bank may launch the digital currency before the 2022 Winter Olympic Games, scheduled to be held in Beijing that February.

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