China leads the world in terms of blockchain and fintech, while the US dollar is the reserve currency of the world. The United States has drawn a lot of criticism from industry experts for its inaction on cryptocurrency and blockchain technology. The latest person to comment on this subject is the co-founder of Ripple, Chris Larsen.
The co-founder and executive chairman of Ripple, Chris Larsen, published an op-ed piece arguing that the United States and China are drawn in a “technology cold war.” According to Larsen, the fact that Chinese miners control about 65 percent of the Bitcoin hash rate, they can gain complete control of the Bitcoin network in future. Moreover, the Ripple co-founder urged U.S. authorities to work in collaboration with blockchain and crypto firms in the country.
China’s blockchain and fintech supremacy
In Larsen’s argument, the superiority of China in blockchain and financial technology might be a significant catalyst to future conflicts between the two economic heavyweights. Furthermore, Larsen claims the U.S. dollar might lose its status as the world’s reserve currency in the wake of digital currencies, digital wallets, blockchain technology and interoperability procedures.
With China leading the world in the fronts as mentioned above, Larsen argues it creates a possibility for the nation to overtake the traditional financial system powered by the U.S. dollar through digital payments such as crypto-assets such as the digital yuan. In his piece, Larsen noted:
“For China, this is a once-in-a-century opportunity to wrest away American stewardship of the global financial system, including its ultimate goal of replacing the dollar with a digital yuan.”
China: has near ubiquitous use of digital payments ✔; piloting state-controlled digital Yuan ✔; has the largest concentration of crypto miners ✔. The U.S. can’t afford to lose this tech Cold War if we want to maintain economic leadership globally. More thoughts below @TheHill https://t.co/FOpS3ceXUC
— Chris Larsen (@chrislarsensf) August 21, 2020
Can the Chinese reverse Bitcoin transactions?
According to a study conducted by the University of Cambridge Centre for Alternative Finance, 65 percent of all cryptocurrency mining operations take place in China. In Larsen’s argument, if the United States loses financial superiority to China, it could threaten digital currencies. He argues that the Chinese could take advantage of the accumulated hash power to influence crypto transactions.
China and the United States are currently embroiled in a battle surrounding technology advancement. Notably, the two companies are battling on the upcoming 5G technology. Chinese firms have been pushing aggressively to have a bite of the American telecom market. Still, U.S. authorities have put in place barriers to the Chinese, citing matters of national security.
