The U.S. government’s regulation of cryptocurrencies is so scattered that it is “actually advantaging Chinese technologies,” according to Ripple CEO Brad Garlinghouse.
Speaking on Fox Business on Oct. 14, the San Francisco-based international payments firm’s CEO repeated last week’s warning that the U.S. approach—or rather lack of an approach—to cryptocurrencies and blockchain technology is so scattered that Ripple is considering leaving the country.
“If the U.S. government’s doing things to advantage Chinese technology at the disadvantage to a company like Ripple and others like Ripple, then that’s a really frustrating place to be,” Garlinghouse said. “And that’s why we have taken the step to look at, should we relocate the company to a country where it is clear?”
The world and the U.S. needs to understand that “we are in a race with China,” he said, adding that “China is leaving others in the dust.’
China’s focus on blockchain began with a bang on Oct. 25, when President Xi Jinping said that China must “take the leading position in the emerging field of blockchain.” That kicked off a land rush to start blockchain firms in China.
“I think the Chinese communist party is being very strategic and it’s very focused on dominating this technology,” Garlinghouse said. “I think there’s little doubt that today China is well ahead where others are around the world. And I think we have to decide as a country, and really the rest of the globe, how we want to respond to that.”
Regulatory clarity needed
Pointing to the 83-page report released by the Department of Justice’s on Oct. 8, “Cryptocurrency: An Enforcement Framework,” Garlinghouse complained that it listed eight separate U.S. bodies that regulate cryptocurrencies.
Each of them, Garlinghouse said, has “a slightly different view on crypto… [s]ometimes it’s looked at it as a currency, or a commodity, or maybe a security. And depending on how it’s looked at, it’s regulated very differently.”
It’s not just China that the U.S. is behind in that regard, he said.
“The U.S. is out of sync with what a lot of other countries, G20 markets—countries like the UK… Singapore, Japan, even the UAE and Switzerland,” Garlinghouse pointed out. “These are all really good examples where there’s a clear regulatory framework.”
Regulatory consistency has worked in American high tech’s favor in the past, he added: “Part of the success of the United States around the internet was because there was clarity for companies to invest.”
And there is a movement to improve that clarity, he said, pointing to the newly introduced, bipartisan Digital Commodity Exchange Act.
“We want there to be awareness around this because my experience has been when people understand the issue, then they’re like, ‘Oh, okay, wait a minute. We didn’t mean to create that dynamic where advantages Chinese technology over us companies.’”
Modern Consensus founder Ken Kurson sits on the board of Ripple.
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