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The US is losing the “tech cold war” to China due to its rigid regulatory approach to blockchain and cryptocurrency-related companies, believes a senior Ripple executive.
In an August 21 opinion piece for The Hill, Chris Larsen, co-founder and president of leading crypto payments firm Ripple, said China’s digital currency leadership is “a once-in-a-century opportunity” to replace the US dollar. with the digital yuan as the world’s reserve currency.
Larsen set out the main reasons why China won the United States in the ongoing technological struggle. Namely, China has “already achieved near universal use of digital payments” via tech giants like Alipay and WeChat.
And while China is “on the verge of issuing its own central bank digital currency – the digital yuan – the US does not yet have an official initiative for the digital dollar,” Larsen noted, adding:
“At least 65% of cryptocurrency mining is concentrated in China, which means that the Chinese government has the necessary majority to exercise control over those protocols and can effectively block or cancel transactions.”
Larsen also mentioned China’s security expansion in Hong Kong, arguing that China is now “the only country in the world that controls two global financial centers”.
To challenge China’s crypto and technology leadership, the United States “must recognize that strong American financial technology companies” are in its own national security interests, Larsen concluded.
The executive said the US must immediately launch the digital dollar initiative to keep pace with the digital yuan, with the next step in establishing Silicon Valley as a global financial technology powerhouse.
Larsen’s comments come amid the continuing regulatory uncertainty surrounding XRP. The third largest cryptocurrency by market capitalization, XRP is used by Ripple in its cross-border applications such as On-Demand Liquidity (formerly xRapid).
On August 20, Ripple CEO Brad Garlinghouse pointed out that the biggest challenge facing Ripple so far is the lack of clarity about the regulatory status of XRP. The cryptocurrency project and Ripple are subject to multiple lawsuits claiming that XRP is an unregistered security.
