Our final article discussed the significance of smart electronic strength regulation and the U.S. is falling dangerously behind. We’re encouraged that some U.S. bureaus are recognizing and welcoming the advantages of this new technology to customers such as the U.S. Consumer Financial Protection Bureau (CFPB) and banks such as the U.S. Office of the Comptroller of the Currency. However, as a whole, business participants that are attempting to find a route to regulatory beliefs in the U.S. are left to parse via an opaque patch quilt of addresses, enforcement activities and dizzying advice.
When jobs and companies, guided by some of the best legal advice available, nevertheless find themselves uncertain about the standing of U.S. regulators, some thing isn’t right. Legislation, applied regularly, should result in predictable results, not regulatory “gotchas” that kill invention.
The primary regulatory dilemma in the U.S. now is this: What electronic resources are “securities”? The response to this question matters considerably. Sophisticated and baffling securities regulations, when wrongly applied, smother business innovation. Imagine imposing legislation intended for the transport of Apple stock for your purchase and purchase of a iPhone or, worse, to each text delivered or received in your iPhone.
The U.S. Securities and Exchange Commission (SEC) has exempted just two electronic assets in the U.S. securities legislation —Bitcoin and Ether. For all other resources, the SEC has largely remained silent, except as it’s made a decision to control certain assets through enforcement proceedings. The web impact is that the SEC has affirmatively put their great housekeeping stamp of approval only two electronic resources, both commanded by China.
The U.S.-China Tech Cold War
The Chinese government subsidizes the huge amounts of energy required to fuel Bitcoin and Ether “miners.” At least 65% of Bitcoin mining is concentrated in China. It’s noted that Ether mining also is controlled by China. By controlling such climate ruining protocols, China is directing countless dollars in mining benefits to China established mining pools. China can also efficiently block or reverse trades.
Is your U.S. really eager to permit China to acquire this new technological and economical Cold War and, together with it, let China to dictate significant sections of a new worldwide payment method? Unfortunately, that’s just what the U.S. is allowing to happen.
Ceding this invention to Communist China increases national economic and safety issues. China has created a national oligopoly for electronic payments operated through businesses like Alipay and WeChat. China is also on the edge of issuing a state-controlled digital money —an electronic yuan.
China’s attempts to control the electronic asset area is an expansion of the multi-decade attempt to hamper the U.S. Dollar’s standing as the international reserve currency. A China controlled platform might be a planet where payments have been obstructed when the originator has too low a “social credit” score; or even a planet where payments are intended to evade U.S. sanctions and money laundering controls.
These situations aren’t only bad for accountable U.S. economic actors trying to find a level playing field on which to compete, it’s damaging for everyone who cares about fiscal inclusion and creating a responsible financial ecosystem for both blockchain and electronic resources.
Ripple’s Commitment to Regulation
Responsible business participants aren’t attempting to prevent regulation. On the contrary, we’re crying out for clever, transparent and principles-based regulation.
In Ripple, we knowingly urge legislators to encourage regulation that doesn’t disadvantage responsible U.S. businesses. Our intention is to enhance the fiscal system from inside, working with governments, authorities and central banks alike to enhance how in which the world moves cash.
To find out more about our attempts to push ahead crypto regulation at the U.S., browse our open letter to Congress signed by Ripple CEO Brad Garlinghouse and Executive Chairman and Co-founder Chris Larsen. And for much more insights about regulation, listen to my latest appearance on the Block Stars podcast.