Expert: US Should Cut Crypto Firms Some Slack to Compete With China

Fintech and regulation experts have said the United States needs to wake up to China's proactive pursuit of a central bank digital currency.

"China is making these very large macro plays. They want to maintain control and be seen as leaders and so adopting blockchain and being public about it, as we saw recently, is going to stir a lot of interest."

Duncan Wong, chief executive of Hong Kong-based startup CryptoBLK, ventured that the recent endorsement of blockchain innovation by Chinese President Xi is likely to accelerate the rollout of the People's Bank of China's plan to launch a central bank digital currency.

As Wasyl noted, China's race to launch its CBDC first is likely to send a signal to global competitors that this is "The new paradigm."

Li Chen, a researcher at the Chinese University of Hong Kong whose work focuses on China's financial development and government regulation, told Fortune underscored that the country's approach to digital currency and blockchain bifurcates between encouragement and caution.

"I think it's fair to say China's fintech revolution would not achieve what it is now without the overall more permissive attitude of Chinese government regulations."

Insofar as [developers] "Remain in these parameters set by the state in terms of the direction of innovation," he said he expected to see accelerated blockchain implementation in China.

Wasyl: U.S. needs to cut blockchain firms "a little more slack. But contrast, Wasyl argued that the U.S. is stuck trying to"regulate [its] way to innovation.

The experts remained unanimous in considering that for the time being, China's CBDC is not likely to pose a threat to U.S. dollar hegemony, but warned that the U.S. needs to cut blockchain firms "a little more slack to allow some exploration" if it is to stay ahead in the game.

This summer, the former PBoC governor characterized Libra as being "inseparable from the global dollarization trend," stressing the imperative for China to maintain a strong monetary status.