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US is losing ‘technological cold war with China’, says Ripple co-founder

Ripple’s chief executive criticized US lawmakers for losing the arms race to China

Speaking at the LA Blockchain Summit conference on October 6, Ripple co-founder   Chris Larsen criticized the United States for falling behind in the race to design “the next generation of the global financial system”.

The speech amplified some of Larsen’s frustrations with US regulations, which prompted the company to consider moving to a different jurisdiction.

Larsen argues that the United States was “terribly behind” in the current “technological cold war with China”, claiming that China’s central government has overtaken American lawmakers in providing legislative clarity, allocating resources, building infrastructure and promoting innovation in blockchain and other emerging technologies, including big data, surveillance and AI “China has recognized that these technologies are the key for those who will control the next generation financial system […] SWIFT and corresponding bank will not be the system with which we will live in the next two decades. ” 

The Ripple co-founder emphasized the failure of the United States to embrace initiatives to digitize the dollar, noting that China is “far ahead in a central bank’s digital currency” (CBDC). Larsen added that a CBDC will allow China to “spread the yuan globally” and undermine the dominance of the US dollar in international markets.

Earlier this week, Deputy Governor of the People’s Bank of China, Fan Yi Fei,  revealed that  the central bank has already settled more than $ 162 million in domestic transactions through its pilot program for Digital Currency and Electronic Payment (DCEP)

Larsen said that Chinese regulators have been much more adaptive than their American counterparts and argued that the Securities and Exchange Commission (SEC) must recognize that blockchain is a critical battleground in the technological arms race with China, rather than maintaining the exclusion policies that were designed to stop the 2017 initial coin offering (ICO) craze.

Larsen also warned of the dangers of China’s dominance in cryptocurrency mining, stating that “labor-proof mining is controlled by China” and that Chinese miners are “under the control of the Chinese Community Party.” “Miners are masters . They can rewrite history if they want. They can block transactions. ” 

The executive chairman of Ripple described the SEC’s policies as favoring proof of work protocols, consolidating China’s control over the global crypto industry.

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