The two most powerful economies, China and the US have been fighting for over two years in a so-called “tech cold war”. Ripple’s co-founder and ex-CEO Chris Larsen warned the crypto community at the LA Blockchain Summit about the United States trailing behind China in designing “the next generation of the global financial system.”
According to Larsen, the U.S. government’s regulatory havoc has placed the US “woefully behind” China in the race for creating legislation framework. Larsen also noted that Chinese officials have created clear legislation, as well as provided resources and infrastructure for the development of blockchain technologies, big data, AI, surveillance, and other innovations.
“China has recognized that those technologies are the keys to who is going to control the next-gen financial system. SWIFT and correspondent banking are not going to be the system we are going to be living with over the next two decades,” Larsen warned.
Larsen also emphasized that China leads the U.S. in digitizing its native currency, as China is “way ahead on a central bank digital currency”. The ex-Ripple CEO also noted that a digital national currency would allow China to internationalize the access to yuan and mitigate the dominance the U.S. dollar has in international markets.
Larsen stressed that Chinese regulatory bodies have been far more flexible than the U.S. Securities and Exchange Commission (SEC). Further, Ripple`s ex-CEO stated that US regulators have to recognize blockchain technology as a crucial part of the technological arms race, as currently the SEC is “maintaining exclusionary policies that were created to stop the initial coin offering (ICO) craze of 2017.”
Going even further, Larsen stated that currently Ripple goes through internal executive reorganization, as well as the organization is considering a relocation, due to regulatory uncertainty. The possible new relocation sites include the United Kingdom and Singapore, but the move has not been decided whether it will occur or not.
“We don’t know how it’s gonna exactly play out. You know, those countries are trying to sort of becoming the fintech centers of the world. You have clarity in places like Switzerland, the U.K., Singapore, Japan,” Larsen stated.
Meanwhile, China’s national bank governor, Fan Yi Fei, disclosed that more than $162 million worth of yuan were settled through its Digital Currency, Electronic Payment (DCEP) pilot program.
“An aggregate of 113,300 personal digital wallets and 8,859 corporate digital wallets have been opened”, Fei noted.