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The US market and authorities continue to be undecided regarding their support for cryptocurrencies, mainly due to the lack of their ability to predict or control crypto assets. This is not true from other major players in the international market; China, for instance, is a placing itself to be a big player in the crypto market, primarily blockchain.
Concerns are being raised about China’s involvement in the crypto world due to the Chinese government’s obsessive and authoritarian tendencies. While the US struggles to comprehend blockchain-powered virtual currencies and define laws and regulations regarding these digital currencies, China is working hard to gain control over the blockchain market.
In a recent opinion piece in The Hill, former Representative George Nethercutt (WA 5th District, 1995–2005) argues that the approach to fostering technological development that the US authorities have presently taken is hurting the US competitiveness in the international market, while China is continuously pushing against the US intellectual property rights in the international market.
In addition, Nethercutt asserts that China is heavily investing in the crypto market to play a bigger role in its market. In fact, China has obtained 70% of the hashrate power of the world’s biggest cryptocurrency, Bitcoin. This essentially means that China has the power to tamper with or alter the Bitcoin blockchain with their power and censor or hide transactions.
In the meantime, cryptocurrencies in the US are still in a state of limbo due to the Securities and Exchange laws and regulations. Many companies are waiting to know whether or not they fall under the regulations applied to securities in the US. This indecision by the US authorities is hurting the US and making it difficult to keep up with the Chinese government in having control in this revolutionary technology.
Time and time again, blockchain-powered virtual currencies have proved that regardless of their current prices at any given time, they are sure to play a larger role in the future of finance and technology.
The lack of regulatory clarity has opened the door to bad actors from abroad. During a congressional hearing, Paul Knierim, deputy chief of operations at the U.S. Drug Enforcement Administration (DEA) made the point that drug cartels are hiring Chinese money launderers to hide their illegally obtained wealth. Moreover, there is also a rise reported in money laundering through cryptocurrencies. Crime stories like these have drawn criticism to cryptocurrencies, and they undermine the potential of cryptocurrencies in the financial industry.
Most of the innovation is still happening in the US according to Nethercutt. Entrepreneurs and rapidly growing are responsible for exploring the ways in which blockchain can enhance our quality of life across a diverse spectrum of business models. Blockchain could improve not only financial transactions but also shipping and logistics, healthcare, recordkeeping and any number of other applications. Which is why it is important that the US government would wield its influence to empower crypto startups and companies that are pushing innovation in this field.