For the users of virtual currencies in America and Europe, there is something that cannot be called good news. This currency is based on technology, and hence the country with more users needs to be updated with the latest technology. But in the case of the US, the use of technology is not as updated as China.
According to Chris Larsen, co-founder, and chairman of Ripple, the US is losing the tech cold war to China. As the US is taking a tough stance regarding blockchain and cryptocurrency-related firms, it affects the prospects of the industry in the long run. China is taking the best advantage of this situation and wants to become the leader of digital currency. In the long run, it aims to replace USD with digital yuan as the reserve currency of the world.
Reasons why China is leading the race
China has made a lot of progress regarding the use of digital payments, and it has used tech companies like Alipay and WeChat for this purpose. Apart from that, it is also gearing up to issue digital yuan, which will be its own central bank digital currency. When compared to this move, the US still does not have a digital dollar initiative.
As nearly 65% of cryptocurrency mining is happening in China, they will have the necessary control to block or reverse transactions in the future. Other than that, China’s expansion into the HongKong financial sector is yet another advantage for the country.
What should the US do now?
According to experts, the US should now focus on the digital dollar initiative and promote American financial tech companies. In this way, Silicon valley can boost as the global financial tech powerhouse in the future.
There are a lot of regulatory uncertainties surrounding XRP, which is the third-largest cryptocurrency when you consider the market cap. Ripple is facing a huge challenge about XRP as the regulatory status of XRP is not yet clear.
Even Ripple, along with various other cryptocurrency projects, are subject to lawsuits, and they can become unregistered security in the long run. This threat has become a huge block for the development of the cryptocurrency industry in the US. On the other hand, the Chinese government is doing its best to promote such technology as it wants to become the future leader of digital currency in the world.