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Ripple CEO Brad Garlinghouse urged US regulators “to step up and lean on digital currencies” to avoid falling behind China on the ground.
In a tweet published on May 26, Garlinghouse warns that “staying complacent is actually bringing us back,” citing an article suggesting that the long-touted Chinese central bank (CBDC) digital currency has the potential to oust the dollar as a global reserve currency.
SWIFT has been overtaken by blockchain technology
Financial dominance of the United States currently relies on both the dollar’s status as a global reserve currency and its control of the Society for Worldwide International Financial Transactions or the SWIFT system.
This facilitates messages between global commercial banks regarding payment orders and acts as an intermediary for most cross-border payments. Control of this system gives the United States significant leverage over its ability to apply financial sanctions.
Cross-border transfers of digital currencies do not require the SWIFT system, nor are they based on the US dollar.
The United States is catching up
While it claims it has no scheduled launch date for its digital yuan, China’s CBDC is currently being tested in several regions.
In terms of the national digital currency, the US is already years behind China, but Garlinghouse believes a more welcoming regulatory framework towards public digital assets like XRP can help regain lost ground.
And while a Chinese CBDC would be entirely out of US control, Garlinghouse was quick to point out that XRP is not exempt from US (or even global) financial supervision.
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