Ask any evangelical proponent of bitcoin about the benefits of the cryptocurrency, and they will list at least 20 ways in which it will liberate humanity from the tyranny of central banks. Some argue, rather unconvincingly, that bitcoin is destined to become an integral part of our financial evolution. They tout the myriad benefits associated with the decentralized digital asset. But, when one actually digs beneath the surface, the supposed benefits of bitcoin simply don’t add up.

What about the mass computing power required to mine the supposed currency? Also, if bitcoin is the future of finance, why is one man, albeit a highly influential one in Elon Musk, able to send it crashing in value with just one tweet? More importantly, what about bitcoin’s association with Beijing?

In March, Peter Thiel, the German-American billionaire entrepreneur and venture capitalist, argued that bitcoin is little more than a “Chinese financial weapon against the U.S.” According to the 53-year-old, “it threatens fiat money, but it especially threatens the U.S. dollar.” Is Thiel, a highly astute commentator, right? Has bitcoin been weaponized by Beijing?

Beijing and Bitcoin

China is responsible for a staggering 75 percent of the world’s bitcoin mining. In April, when a power outage occurred in the Xinjiang region, bitcoin processing was severely impacted. For all the talk of a decentralized currency, the creation of bitcoin is largely controlled by Beijing. This, of course, is strategic. After all, considering the cryptocurrency was designed with the dethroning of the U.S. dollar very much in mind, why wouldn’t the country engage in aggressive acts of mining?

In mainland China, the use of cryptocurrencies for financial transactions is strictly forbidden. The reason for this ban is not surprising. Digital, decentralized currencies invite the outflow of capital; this idea goes against everything the government believes in. Remember, this is a country that places prime importance on a unified narrative; the Chinese government’s refusal to acknowledge crypto, including bitcoin, as legal tender is totally understandable. One currency, and one currency only, for the people.

Although Beijing recently introduced a new set of cryptocurrency restrictions, Chinese citizens, as well as expats living in the country, are still permitted to hold the likes of ethereum and bitcoin. Ed Browne at Newsweek is worried, however. He writes that although people are still allowed “to hold cryptocurrencies, they cannot do much else with them.”

Yes, like everyone else in the world. Have you tried to make a purchase with bitcoin, for example? No, of course not. In its current form, bitcoin is, at best, a speculative asset, highly volatile and largely detached from the financial realities of today. Furthermore, as a so-called hedge against inflation, bitcoin has experienced quite a trimming in recent times. In the space of three weeks, between the first week and final week of May, it dropped all the way from $60,000 to just $35,000 in value.

So, what is Beijing’s goal here? Why bother with bitcoin at all?

Digging Beneath the Surface

Right now, the communist country is busy rolling out its own digital currency, the e-RMB, centralized in nature and very likely to challenge the U.S. dollar’s dominance. Centralized bank digital currencies, or CBDCs, like China’s digital yuan, allow governments to track every transaction. In a land where privacy is nonexistent, the move to a CBDC is a no-brainer.

Furthermore, as Edward Snowden has discussed, CBDCs give governments the power to issue money with an expiration date. The idea here involves keeping as much money in circulation as possible, and less in savings, thus decreasing the likelihood of economic collapse—at least in theory. As Snowden put it, “for economic stimulus, we [the government] can give you a payment, but if you don’t use it, you lose it. Simply the idea that anyone anywhere can revoke your money is terrifying.” The terror stems from even greater levels of government control over the people. If we are being honest here, what government doesn’t want greater control over its people?

At the same time, although China appears to be cracking down on bitcoin, appearances can be deceptive. It is important to remember that Beijing issued a similar ban in 2013, then again four years later. We have been here before, folks. The supposed crackdown is more for show, a harshly worded public service announcement disguised as actual policy. In an article addressing the recent ban, Reuters found “it was still possible for Chinese individuals to buy bitcoin and other cryptocurrencies and trade them on overseas crypto exchanges such as Binance.” Mining, like trading, is still occurring. Bobby Lee, CEO of cryptocurrency wallet Ballet, believes that the current pressure from China will ease off—just like it did in 2017, and also in 2013.

But, even if mining in China becomes less frequent, this doesn’t mean that the country will give up on the process. No, when it comes to mining, China is invested, not just domestically but also abroad. There is talk of some Chinese mining operations relocating to Europe and the U.S. Do you really think the government won’t be involved, especially if these companies start to turn sizable profits?

For what the future of mining might entail, it helps to look at what’s going on in Iran right now.

From Beijing to Tehran

As the WSJ recently reported, China and Iran have united “to advance their strategic ambitions.” The two countries have entered into a 25-year “strategic partnership,” that will see China invest “several hundred million dollars in a variety of Iranian projects, including nuclear power, ports, and oil and gas development.”

The WSJ reporters failed to add one other investment, an odd one, too: the construction of bitcoin farms.

It makes sense that Iran, a country that has been hit hard by international sanctions, would look to cryptocurrencies as a potential viable alternative to participation in the dollar-backed global market. As a paper published by researchers at the University of Cambridge demonstrates, Iran continues to become a more significant player in the mining of bitcoin. Last year, the country accounted for close to 5 percent of the bitcoins mined globally.

Going forward, each year, according to a new study conducted by researchers at Elliptic, a blockchain data firm, Iran’s mining farms will generate somewhere around $1 billion in revenue. Mining is a lucrative business, and China’s investment is a strategic one. Considering Iran is home to some of the richest natural resources on earth, it’s easy to see why the communist nation is so heavily invested. Today, there are at least 14 legal bitcoin farms operating across the country, and a number of these appear to be run by Chinese citizens.

The rogue state, like Russia, views decentralized cryptocurrencies, especially bitcoin, as a means of generating additional revenue and additional employment opportunities. As Behnam Gholipour, a journalist at Iran Wire, wrote in March, “If large mining farms are established, the need to employ manpower for monitoring and repair, security, electrical engineers and technical staff related to hardware and software equipment will increase, which leads to more job opportunities in other sectors.” Gholipour continued, suggesting the effects of crypto mining “could generate US$2 million a day and $700 million a year in direct revenue from cryptocurrencies.” Beijing, of course, will pocket a sizable portion of the revenue generated.

So, what does the future hold? If I could answer that question definitively, I would be a far wealthier man.

Nevertheless, I will venture that going forward, the e-RMB is the only currency that will be recognized in China. And as the country tightens its grip over Africa, the fastest-growing continent in the world, and parts of southeast Asia, there is every reason to believe that Xi Jinping has plans to roll out the currency worldwide.

As the U.S. dollar continues to lose its purchasing power, a replacement may very well be on the horizon. Will it be bitcoin? Not likely. But, as long as it survives, or a potential replacement, like ethereum, for example, the dollar is challenged. As bitcoin’s only other realistic challenger at present, it should be noted of ethereum that China also exerts considerable levels of mining influence over it, too, though plans to move the blockchain to a proof-of-stake system might make that less significant.

In the West, as long as appealing cryptocurrencies survive, free from any sort of major regulations, governments remain distracted by the never-ending volatility associated with them. The ups and downs, the gains and losses, and the trials and tribulations associated with the bitcoins, dogecoins, and the other 10,000 coins of this world are more than enough to keep financial regulators preoccupied and distressed. This, one assumes, is part of the plan.

As Sun Tzu, a man who knew a thing or two about warfare, said, “the whole secret lies in confusing the enemy, so that he cannot fathom our real intent.” For China, America is very much the enemy. And with cryptocurrencies, we are all very much confused. The Chinese government, however, is not.

John Mac Ghlionn is a researcher and essayist. His work has been published by the likes of bitcoin magazine, New York Post, South China Morning Post, and the Sydney Morning Herald.