Bitcoin becomes a tool in U.S.-China geopolitical rivalry

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Olga Shendetskaya

27.04.2026

Bitcoin becomes a tool in U.S.-China geopolitical rivalry — U.S.-China rivalry moves into Bitcoin

The strategic rivalry between the United States and China has moved into the cryptocurrency sphere. Admiral Samuel Paparo Jr., commander of U.S. Indo-Pacific forces, told a Senate committee that Bitcoin has implications for national security.

Highlights

U.S. Indo-Pacific commander declared Bitcoin important for national security.
China holds the world’s second-largest government Bitcoin reserve while banning it domestically.
Both countries are actively competing for control over Bitcoin assets and mining infrastructure.

“Bitcoin is a reality,” he said. “It is a valuable computer science tool used to project power. And beyond its economic aspect, it has truly important applications in cybersecurity.”

The following day, during a House hearing, Paparo confirmed that the Pentagon operates its own Bitcoin node and is conducting operational tests to secure and protect networks using the Bitcoin protocol. It was the first public acknowledgment by the U.S. military on the subject.

Divergent strategies

According to Cryptopolitan, China’s position is notably complex. In 2021, Beijing banned Bitcoin and all cryptocurrency activities for its citizens, citing environmental concerns, fraud risks, and illegal capital flows. Nevertheless, China is believed to hold the world’s second-largest government Bitcoin reserve.

At the same time, Beijing is aggressively fighting to reclaim 127,000 BTC (approximately $15 billion) confiscated by the United States from Chinese billionaire Chen Zhi. If successful, China would surpass the current U.S. holdings of around 198,000 BTC.

Bitcoin as a geopolitical tool

Bitcoin is increasingly being used by governments as a means to bypass sanctions and as a strategic reserve asset. Iran now accepts Bitcoin for tanker passage through the Strait of Hormuz, Russia announced it will begin accepting Bitcoin for international trade starting in July, and Taiwan is considering it as a potential reserve in the event of conflict with China.

In the United States, Republican senators have introduced the “Mining in America” bill to reduce reliance on Chinese mining equipment. Currently, 97% of the hardware used in U.S. Bitcoin mining operations is Chinese-made.

New front in superpower competition

The cryptocurrency domain has become a new arena in the great-power competition between Washington and Beijing. While the U.S. focuses on technological leadership and reducing dependence on Chinese hardware, China continues to accumulate Bitcoin quietly while maintaining a domestic ban.

What began as a technological experiment has evolved into a strategic asset. Both nations now recognize that influence over Bitcoin — and the broader crypto ecosystem — carries significant geopolitical weight in the 21st century.

We also reported that a Bitcoin developer proposes a fork to reassign Satoshi coins.

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