Most of this is the usual “the post-WW1-hyperinflation is coming” nonsense that is the perpetually rehashed canon of liberation crypto cultists “insurrectionists”. Yes, all doom and gloom and inflation and decline and fall of …. The West.

But pause here again, and wonder: to which economies? This almost always points to the USA. However, strangely, you never hear about the policies of the current 2nd largest economy on earth and the one that is soon to be #1: China.

Recently, the self-described “Crypto-Maximalist” and large-scale crypto investor, Peter Thiel made a very surprising and interesting observation: Bitcoin and by implication all other PoW Crypto-currencies are likely a “Chinese financial weapon”.

Now, why would he say such a thing?

Mr. Tan coyly offers this: “Bitcoin’s value lies in its ability to create a parallel system of value that could potentially one day supersede established regimes.” It’s important to observe Mr. Tan’s phrasing: “a parallel system of value”, NOT a currency. Exactly what could this mean and parallel to which system might he be alluding?

And the other seeming anodyne remark starts to reveal who he might be referring to as the true beneficiary of this “parallel system” with this observation: “That central banks are now in a race to issue their own digital currencies should be revealing — it’s common to first deride that which is feared, before co-opting it’s best parts.”

Yes, there is some movement toward having national digital currencies in several countries, but the one furthest along in this project and the one that has an interesting set of policy and economic intentions in this regard: China.

It is important at this point to note that China has made it illegal for all its citizens to buy, sell, convert or transfer any crypto-currencies of any kind and it is illegal to possess an account on any exchange that permits buying and selling crypto-currencies. And the penalties include prison. In addition, no exchanges that trade in cryptocurrencies are legal in China.

However, very strangely: It is completely legal to mine and profit from mining, as regulated by the Chinese Communist Party. And Chinese mining operations on Chinese territory account for nearly 70% of crypto mining and Chinese ASIC and rig manufacturers account for over 90% of the market.

What does it say about a country that on the one hand threatens harsh penalties to any of its citizens to transact and profit personally from crypto-currencies and at the same time permits the production and the worldwide infrastructure for creating and trading them?

So, is Peter Thiel right?

And is the system that Belt-and-Road and Digital Renminbi and the threat of Bitcoin to the dollar reserve system that China (and many other autocratic and corrupt regimes) would like to see out of the hands of liberal democratic ones?

You decide.