7th April, 2021 Peter Thiel: Bitcoin Could Be 'Chinese Financial Weapon'
PayPal founder Peter Thiel, in a seminar on Big Tech and China, said China's approach to its own cryptocurrency should concern America.
He dismissed the digital yuan, 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.
“It threatens fiat money, but it especially threatens the U.S. dollar,” he added.
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."
Wall Street Journal – 19th April, 2021
Excitable commentators who say China’s digital yuan is a threat to the dollar should take the word of Chinese central bank deputy governor Li Bo, who said on Sunday that the country’s digital yuan isn’t an effort to displace the greenback.
The yuan’s digitization is fascinating in terms of its political implications and regarding the new economic levers it might give the government domestically. But it offers relatively little as a tool to boost the yuan’s limp international presence, let alone as a weapon to challenge the dollar’s supremacy.
As the currency of the world’s largest trading economy, the yuan punches far below its weight. According to an International Monetary Fund study published in 2019, data from 2016 suggests that about 93% of China’s imports and 95% of its exports were denominated in dollars.
Not much seems to have changed. In February, the yuan’s share of global payments was 2.2%, compared with February 2016’s 2.45%, according to data from the Society for Worldwide Interbank Financial Telecommunication. Even that overstates its international use: A consistent three-quarters of its total global payments are conducted in Hong Kong.
Speaking to the U.S.-China Economic and Security Review Commission last week, Martin Chorzempa, senior fellow at the Peterson Institute for International Economics, said that he has yet to see a convincing argument of how digitization really promotes global use.
Over in UK on 19th also - British finance minister Rishi Sunak told the Bank of England on Monday to look at the case for a new “Britcoin”, or central bank-backed digital currency, aimed at tackling some of the challenges posed by cryptocurrencies such as bitcoin.
A BoE-backed digital version of sterling would potentially allow businesses and consumers to hold accounts directly with the bank and to sidestep others when making payments, upending the lenders' role in the financial system.
"We're launching a new taskforce between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency (CBDC)," Sunak told a financial industry conference.Soon after, Sunak tweeted the single word "Britcoin" in reply to the finance ministry's announcement of the taskforce.
The BoE said a digital version of sterling would not replace either physical cash or existing bank accounts.
"The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, and will engage widely with stakeholders on the benefits, risks and practicalities of doing so," the BoE said.
BoE Governor Andrew Bailey has previously said bitcoin, the best known cryptocurrency, fails to act as a stable store of value or an efficient way to make transactions, making it ill-suited to serve as a currency and a risky bet for investors.
Central banks also took a dim view of efforts by Facebook to set up its own digital currency.
Even so, cryptocurrencies have received growing interest from mainstream financial institutions, and bitcoin hit a record high of nearly $65,000 on April 14, up tenfold in the space of a year.
Bitcoin and other cryptocurrencies posted sharp losses on Friday, onconcern that U.S. President Joe Biden’s plan to raise capital gains taxes will curb investments in digital assets.
News reports on Thursday said the Biden administration is planning a raft of proposed changes to the U.S. tax code, including a plan to nearly double taxes on capital gains to 39.6% for people earning more than $1 million.