China Trying to Dominate Blockchain, Control Digital Universe

In the wake of Coinbase’s historical debut as the first crypto company to make its stock market debut through a direct listing on the Nasdaq on Wednesday April 14, a former Trump administration Trade and Manufacturing Policy assistant Peter Navarro has argued on Wednesday that China is trying “to dominate blockchain” in a bid to control the world.

“China probably already knows how to crack, decrypt bitcoin so it can be disrupted there,” Navarro told “Mornings with Maria” on Wednesday.  “So if it controls the digital universe there and also has the ability to basically hack that system, it controls everything.”

Navarro’s view slightly shares a similar perspective with related developing arguments including that of investor and PayPal CEO, Peter Thiel, who recently wondered if Bitcoin should not be “thought, in part, as a Chinese financial weapon against the US” as “it threatens fiat money but especially it threatens the US dollar” and threatening to weaken it.

Earlier this week, there were reports of US government officials being reportedly asking questions about China’s plan regarding its Digital Currency Electronic Payment (or DC/EP), which is planned to be widely demonstrated in no more than 100 days at the Olympic Winter Games of 2022. Bloomberg reports that the officials are eager to know how the digital yuan would be distributed, if the digital yuan can be used to work around US sanctions and whether the CBDC poses any threat to the dominance of the US dollar in the current global financial system.

Northern Europe’s largest financial group Nordea considers the DCEP, whose trials have been extended to more Chinese regions of late, as “another and greater threat against the US’s monetary capacity” posing “an even bigger challenge”, it says in a new analysis. It states: 

“As China’s GDP and role in world trade continue to grow, it seems natural to expect that countries, especially its neighbouring countries, will to a larger and larger extent start to use China’s currency as both invoicing and financing currency. And if demand for China’s currency increases, the appetite for dollars will decrease, which – keeping everything else equal – leads to reduced monetary capacity, which leads to decreased fiscal capacity. And so on.”

Navarro tags the Chinese move in the blockchain and digital currency space as “frightening”. He said the “the whole bitcoin empire digital coinage, dollars that’s all predicated on this thing called blockchain technology, the idea that you can perfectly encrypt a system,” presents a problem which is that China is trying to dominate blockchain and “you can guarantee” or take it “to the digital bank” that China already knows how to decrypt bitcoin “and also has the ability to basically hack that system.”

Citing the analogy of a Mahanian theory which states that the one who controls the sea lines of communication in the 1800s and 1900s controls the world, Navarro believes that the one who controls the digital currency space in the 21st century controls the world “and that’s where communist China is going right now.”