Opinion: Coinbase CEO: China sees possibilities in crypto. America too.

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The cryptocurrency market has seen some recent turbulence. This could lead policymakers to view it as an unstable asset class. But they would miss the big picture. Failing to see that crypto is about much more than individual transactions risks undermining Americas’ centuries-old role as a global financial leader and center of innovation.

We and others in the industry have called on policymakers and regulators to give us the regulatory clarity needed to ensure consumer protection and realize the promise of crypto. But instead of robust new rules that would help those efforts, were receiving threats of enforcement action. By enforcing restrictive policies, the United States is inadvertently pushing crypto innovation overseas. This shift will jeopardize the Americas’ legacy of pioneering technological advancements and weaken our national security posture.

“The technology-driven financial system of the 20th century helped make it the American century.

Cryptographic blockchains are not financial services; it is a transformative technology that can revolutionize a wide range of industries, of which financial services is just one example. Every day, millions of people around the world use these technologies to streamline their interactions with the traditional financial system. They facilitate cross-border payments, provide inflation protection, reduce fees and waiting times, and democratize access to financial services in regions where equal access is not guaranteed. We were even now seeing these blockchains serving as a platform for creatives to monetize their work in perpetuity, instead of seeing the value of their work mined in secondary markets.

Money has always embodied innovation. This has been true from the first coins as physical stores of value, which took us from barter to trade, to the advent of portable paper money which enhanced lending and investment. The technology-driven financial system of the 20th century helped make it the American century. The US dollar has anchored the global economic system since 1944, and networking technologies born out of the visionary launch of the Defense Advanced Research Projects Agency in 1958 have solidified and expanded the dollar’s influence. The role of the US dollar as the world’s reserve currency confers countless soft and hard power advantages.

Public Investments of the Americas has underscored that the country driving innovation in global financial systems is best placed to safeguard the economic interests of its peoples, protect its national interests and propagate its values. Now we face a new threat.

Today, the United States and other democratic nations face digital systems promoted by an ambitious adversary, China. Two Chinese technology giants, Alipay and Tencent, offer integrated payment systems with direct and instant access to a range of services. The Chinese Communist Party promotes these powerful and scalable platforms around the world through its Belt and Road Initiatives, with its integrated social credit system. And with the recent launch of its digital yuan, China aims to directly challenge the US dollar and its role in global trade. Given these moves and China’s strategy to leverage fintech to project its own national interests, it’s no surprise that Hong Kong is positioning itself as a global crypto hub.

But it’s not just China that can see the possibilities. Crypto, like the internet before it, has the potential to modernize finance and many other industries, from supply chains to social media, by providing a faster, cheaper, more private and accessible platform. It’s already underway. Recognizing this, traditional financial capitals including the UK, UAE, Brazil, Japan, European Union, Australia, and Singapore are also vying to become crypto hubs.

The connection between fintech and democratic values ​​is integral to the identity of the Americas. This is why I decided to base Coinbase in the United States

“If we fail today, the next generation of Americans will pay the price.”

Today, four out of five Americans believe that the current financial system does not serve their interests; 70% think their children will be worse off. This dissatisfaction coincides with our financial infrastructure nearing technological obsolescence, increasing the risk that America will cede its influence.

Smart, tailored regulation in the 1990s and early 2000s allowed the United States to define the internet age. Just as then, now is the time for Congress to seize the historic opportunity presented by crypto and pass comprehensive legislation that protects consumers and fosters innovation. Crypto has the potential to play an important role in boosting the US economy and promoting democratic values ​​around the world.

If we fail today, the next generation of Americans will pay the price. Spent billions today to repatriate technologies like semiconductors and 5G infrastructure. We should learn from this mistake. Bringing crypto and blockchain innovation back to the United States in a decade will take a colossal and sustained effort that may not succeed. But we can save ourselves that struggle if a cool head prevails and we work together. Let’s modernize our financial system and reaffirm our role as global technology leader rather than abdicate it.

Brian Armstrong is the CEO of Coinbase.

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