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The U.S. can’t lose the bitcoin race to China
TL;DR
The U.S. risks losing its global financial dominance to China as it develops the digital yuan and strengthens its position in the crypto ecosystem. China's dual strategy of promoting a centralized digital currency while accumulating bitcoin poses a significant challenge to U.S. influence.
Key points
- U.S. dollar dominance is challenged by digital assets
- China is executing a long-term strategy with the digital yuan
- China dominates mining hardware supply chains
- China holds the second-largest state-held bitcoin reserve
- China's dual strategy poses a significant threat to U.S. influence
Mentioned in this story
Chinese Communist Party
digital yuan
For decades, the U.S. dollar has amplified American power by fueling our economy, strengthening our military and giving us unmatched global influence. But today, the dollar’s dominance is being challenged in a new arena: digital assets.
The country that leads in digital assets will shape how money moves, how sanctions are enforced and how global power is projected. But while Washington debates, Beijing is executing a long-term strategy.
The Chinese Communist Party (CCP) has rolled out its digital yuan to expand its influence abroad and build payment systems that can bypass the U.S.-led financial order. At the same time, China remains deeply embedded in the crypto ecosystem, dominating mining hardware supply chains and maintaining the second-largest state-held bitcoin reserve.
That dual-track strategy is what makes China so dangerous. The CCP is pushing a centralized digital currency designed for surveillance and control while also stockpiling bitcoin, a decentralized system that it cannot fully control but can heavily influence. If China can shape both systems, it gains leverage no matter which direction the global financial system evolves.
That’s why we can’t afford to treat bitcoin like a financial sideshow.
Bitcoin is more than just a currency, though. It is the center of a paradigm shift in national security that the U.S. military is moving to capitalize on.
When I asked Secretary of War Pete Hegseth whether bitcoin can be used to project power and secure our advantage against China’s digital authoritarianism, his answer during a congressional hearing last month was direct: “Yes and yes.” While many of those department-wide initiatives remain classified, Hegseth confirmed that operational efforts are underway.
Q&A
How is China using the digital yuan to challenge the U.S. dollar?
China is rolling out the digital yuan to expand its influence abroad and create payment systems that can bypass the U.S.-led financial order.
What is the significance of China's bitcoin reserves?
China holds the second-largest state-held bitcoin reserve, which allows it to influence the decentralized cryptocurrency market while promoting its centralized digital currency.
What are the implications of China's dual-track strategy in digital assets?
China's strategy of promoting a centralized digital currency alongside accumulating bitcoin gives it leverage over the evolving global financial system.
Why is the U.S. concerned about losing the bitcoin race to China?
The U.S. is concerned because losing the bitcoin race could undermine its economic power, military strength, and global influence in the digital asset landscape.
