Cryptocurrency and blockchain technology are at the forefront of a great power struggle between the U.S. and China, and the U.S. is falling behind. Chinese-affiliated cryptocurrency exchanges make up the majority of global trading, and China has already deployed its e-Yuan beyond its borders. In parallel, criminal networks operating out of China have stolen and laundered billions of dollars in digital assets worldwide.
The U.S. has been left behind as only three of the top 15 cryptocurrency exchanges by volume are American companies. Some of the largest American market makers and exchanges are now moving offshore, seeking regulatory frameworks in places such as Dubai, Singapore, and Hong Kong.
If the U.S. does not respond, the future of cryptocurrency will be owned by China, which will result in less financial freedom, less creative influence, more opportunities for financial crimes, and a diminished reliance on U.S. financial firms and the U.S. dollar.
The only way for U.S. interests to win this ‘horse race’ is to foster innovation in decentralized finance, embracing the open society and bold thinking that are fundamental to America. Adam Zarazinski, founder of Inca Digital and a major in the Air Force Reserve JAG Corps, believes our national security depends on it.