The cryptocurrency world is now over a decade old, however, the need for regulating the field has only ramped up over the past couple of years. The main reason behind promoting regulations in the United States of America was to bolster innovation and new technologies that have great potential. In fact, Facebook’s Libra, which was scrutinized for its plans for a global digital currency, has been working with regulators around the world to satisfy these at the earliest.
Similarly, Ripple has been advocating regulatory clarity in the crypto-space, especially for its sought-after digital currency XRP. The company moved closer to regulators and established an office in Washington D.C to work with lawmakers. However, there have been no big developments on this front. As China claims to lead the revolution with the release of its Digital Currency Electronic Payment [DCEP], crypto-businesses in the country are getting antsy.
Ripple CEO Brad Garlinghouse has been following up on China’s progress, while also urging U.S regulators to “set up and lean into digital currencies.” In a recent tweet, he said,
“Remaining complacent is actually setting us back, while China’s grip on both crypto and fiat payments becomes stronger.”
The competition between China and America has been getting fierce due to existing tensions from the trade war. In 2018, U.S President Donald Trump had imposed a 25% tariff on $50 billion of Chinese exports, and in retaliation, China had threatened its own tariffs on $50 billion of U.S goods. The trade war still continues, with the countries trying to best each other.
However, China appeared to be taking the lead as its central bank, the People’s Bank of China [PBoC], announced that the launch of its DCEP will be soon and it will be running pilot tests at Olympic venues. In fact, the trials are already underway in Shenzhen, Suzhou, Chengdu, among others.
While the Chinese are introducing bills to fund blockchain projects in the country, many, including Garlinghouse believe that U.S regulators are still drawing a pros and cons list and prevaricating, despite companies like Ripple being willing to work with regulators.
Interestingly, according to a recent report, apart from replacing the fiat cash with a layer of traceable digital cash, the DCEP could also perhaps challenge the USD’s position as the reserve currency of the world.
As the U.S watches the steady evolution of CBDCs, JP Morgan’s new report additionally claimed that the U.S had the most to lose if CBDCs took off. The analysts of the report argued that the launch of a centrally backed digital currency could undermine America’s geopolitical power, which China has been considering doing for a while.
As China moves closer to launching its digital currency, America can still be seen waiting on the sidelines.
