Commentary on Political Economy

Wednesday, 7 April 2021


Peter Thiel calls bitcoin ‘a Chinese financial weapon’

Max Chafkin

Peter Thiel is “pro-crypto” and “pro-bitcoin maximalist”, but he also thinks the cryptocurrency may be undermining America.

Thiel, the venture capitalist and conservative political donor, urged the US government to consider tighter regulations on cryptocurrencies in an appearance on Tuesday (Wednesday AEST).

Peter Thiel. Bloomberg

The statements seemed to represent a change of heart for Thiel, who is a major investor in virtual currency ventures as well as in cryptocurriences themselves.

“I do wonder whether at this point, bitcoin should also be thought [of] in part as a Chinese financial weapon against the US,” Thiel said during an appearance at a virtual event held for members of the Richard Nixon Foundation. “It threatens fiat money, but it especially threatens the US dollar.”

He added: “[If] China’s long bitcoin, perhaps from a geopolitical perspective, the US should be asking some tougher questions about exactly how that works.”

Thiel was joined by former Secretary of State Mike Pompeo and former National Security Advisor Robert O’Brien.

The conversation between Thiel, who has frequently criticised American companies that do business with Beijing, and two hawkish former members of the Trump administration, was largely focused on US-China relations. It was moderated by Hugh Hewitt, the talk radio host and the chief executive of the Nixon Foundation.

Forbes previously reported some details of the event.

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During the talk, Thiel expanded upon previous criticism of Alphabet’s Google, which he accused of working against American interests in a 2019 speech. On Tuesday, he added that he’d pressed employees in the company’s artificial intelligence division about whether their technology was being used in China’s Xinjiang region, where the US says the country has detained ethnic Uyghurs in internment camps, which some US officials have said amounts to genocide.

The answer, Thiel said, was, “Well, we don’t really know—and don’t ask any questions.” Thiel continued: “You have this almost magical thinking that by pretending that everything is fine, that’s how you engage and have a conversation.”

China has denied mistreatment of ethnic and religious minorities in Xinjiang, and Google has said it doesn’t work with the Chinese military.

Apple, TikTok

Thiel, who left Silicon Valley in dramatic fashion in 2018, complaining that it had become a “one-party state”, didn’t confine himself to criticising Google. He suggested that the US scrutiny of American tech companies should also include Apple, noting that the company makes most of its devices in China, where labour standards are laxer than in the US and Europe.

“Apple is probably the one [tech company] that’s structurally a real problem” for US interests, he said. “Apple is the one that has real synergies with China.”

Thiel also suggested that the US should follow India in banning TikTok, the social app owned by Chinese company ByteDance, and which he called “this sort of incredible exfiltration of data about people”.

Thiel noted that if it were banned, TikTok would likely be replaced by similar apps, as has happened in India. “I don’t think it was like a tremendous, tremendous loss” in India, he said.

The TikTok comments dovetail with messaging from Facebook, where Thiel sits on the board of directors. Facebook has portrayed TikTok as a threat to US values.

Facebook’s ‘woke politics’

But Thiel also criticised Facebook itself, for nurturing what he called “woke politics”, noting that the company had declined to take a firm stand on protests in Hong Kong last year.

“There were more employees at Facebook who were born in China than who were born in Hong Kong,” he said. “And the Chinese nationals actually said that, you know, it was just Western arrogance, and [the company] shouldn’t be taking Hong Kong’s side … And the rest of the employees at Facebook sort of stayed out of it.”

Thiel also criticised Facebook—along with other tech companies—for “de-platforming President Trump”, a reference to the company’s decision to ban President Donald Trump for inciting the January 6 storming of the US Capitol.

“There’s been outright censorship,” Thiel said. “And when you do it with the President of the United States, that does feel like you have really crossed some kind of Rubicon.”

The appearance with Pompeo could have implications for the 2024 presidential race. The former secretary of state is widely seen as a possible candidate for the Republican nomination—and Thiel has signalled a willingness to back figures closely aligned with Trump.

He was a major backer of Trump in 2016, and recently donated $US10 million ($13 million) to a PAC supporting the potential Senate candidacy of J.D. Vance, an author and conservative political figure who previously worked at a Thiel-backed venture capital fund.


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