Saturday, September 18 2021

A member of a congressional group tasked with examining the national security implications of the United States’ economic relationship with China said Thursday that bitcoins is not a threat to the US dollar, contrary to what Peter Thiel thinks.

Specifically, bitcoin does not compete effectively with fiat currencies due to its volatile price, said Alex Wong, a member of the U.S.-China Economic and Security Review Commission established by Congress in October to assess U.S. relations. Chinese.

During his audience Thursday Wong made the comment after questioning an expert witness about the accuracy of Thiel’s recent statement. Claim that bitcoin would be a threat to the United States and that it would benefit Beijing.

Related: PBoC softens the tone towards Bitcoin, Stablecoins, calling them an ‘alternative investment’

“I think the features that make bitcoin attractive make it not really competitive with fiat currencies because when you buy bitcoin you don’t really know it’s going to be twice as much or 20% less tomorrow,” Wong said. . “It’s extremely volatile.”

Yaya Fanusie, deputy principal researcher at the Center for a New American Security and expert witness in question, replied that the concerns of the American entrepreneur were “exaggerated”.

Fanusie said Thiel was referring to the fact that the computing power to mine bitcoin is heavily concentrated in China, so the country may be able to own and control bitcoin. In reality, he claimed, that wouldn’t be a problem due to the decentralized nature of the bitcoin network.

Read more: Are 51% attacks a real threat to Bitcoin?

Related: Bitcoin market performance in the first quarter of 2021

“If there had ever been a case where there was so much leverage or disadvantage to national security, it’s not as if additional mining can’t be built outside of China,” he said. declared Fanusie.

Thiel, the co-founder of digital payments giant PayPal, a bitcoin maximalist and Ethereum’s first funder, was critical American tech companies such as Facebook and Google for their ties to China. He also co-founded tech company Palantir in 2004, whose clients include CIA and FBI intelligence agencies, according to TechCrunch.

Bitcoin isn’t as good as it looks at breaking sanctions, and stablecoins are more likely to compete with fiat currencies in the future, according to Wong.

“They are less likely to compete with the US dollar than with countries that have limited access to regular dollars and use stablecoins as a substitute,” Wong said of stablecoins. Meanwhile, the People’s Bank of China, the country’s central bank, has was clear its planned digital yuan will be the one and only yuan-indexed stablecoin used in China.

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