In an opinion piece on May 30, the Coinbase CEO wrote that recent crypto industry turbulence “might make it tempting for policymakers to write it off as an unstable asset class.”
This is effectively what U.S. regulators have been doing, missing the forest for the trees in treating crypto as a speculative or gambling tool rather than a financial technology foundation.
“Failing to see that crypto is about much more than individual transactions risks America’s time-honored role as the global financial leader and an innovation hub.”
Coinbase Boss on China
The message has been reiterated by several industry executives and even a number of high-ranking senators. However, it has fallen on deaf ears so far, with the Securities and Exchange Commission (SEC) refusing to acknowledge that this new asset class needs its own legislation.
“By enforcing restrictive policies, the U.S. is inadvertently driving crypto-innovation offshore,” said Armstrong.
He went on to state that America and other democratic nations are up against digital systems “promoted by an ambitious adversary, China.”
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China is promoting its digital platforms Alipay and Tencent globally through its Belt and Road Initiatives, he cautioned. There is also the digital yuan central bank digital currency (CBDC) which is being pushed hard by Beijing. Furthermore, China aims to directly challenge the U.S. dollar and its role in global commerce, warned Armstrong.
“Given these moves and China’s strategy to leverage financial technology to protect its own national interests, it should come as no surprise that Hong Kong is positioning itself as a global crypto hub.”
China is the biggest threat, but other nations are racing ahead with the rollout of crypto regulations. These include the U.K., United Arab Emirates, Brazil, Japan, the European Union, Australia, and Singapore, all of which are vying to become crypto hubs.
U.S. Financial System Falling Behind
The Coinbase CEO went on to reveal that the majority of Americans feel the current financial system doesn’t serve their interests. Surveys suggest that 70% believe their children will be worse off if nothing changes. Galloping national debt (which now has no limit) and rampant inflation are affecting all but the wealthiest Americans.
“If we fall short today, the next generation of Americans will pay the price,” he warned.
Coinbase was threatened with legal action by the SEC in March. The firm has requested clarity on regulations and dialogue with the regulator, which continues to put up walls and deny its appeals.
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