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Ripple‘s co-founder believes the US is losing the tech war with China.

At the LA Blockchain Summit on October 6, Chris Larsen criticized the United States for not playing a strong enough role in shaping the “next generation of the global financial system.”

The crypto firm’s executive chairman said during an interview at the virtual event, “We are in a tech cold war with China, and that goes across the spectrum, whether it’s communications, surveillance, data, AI, but also blockchain and digital assets, and the reason is that China has recognized that those technologies are keys to who is going to control the next-gen financial system.”

Referring to the global messaging network used by banks and other financial institutions to quickly, accurately, and securely send and receive information, such as money transfer instructions, he said, “SWIFT and correspondent banking is not going to be the system we are going to be living with over the next two decades.” 

Larsen said the US has fallen “woefully behind,” pointing out that Beijing is way ahead of Washington in terms of legislative clarity, resource allocation, infrastructure development, and tech innovation.

He said Washington has failed to properly embrace dollar digitization, pointing out that China is “way ahead on a central bank digital currency” (CBDC) – commonly known as the digital yuan. Larsen warned that China’s CBDC will empower it to “spread the yuan globally,” undermining US dollar hegemony.

China’s regulators are much more proactive than those in the US, Larsen said, stressing that the US Securities and Exchange Commission, a federal government regulator, needs to recognize the vital role blockchain can play in America’s tech war with its Asian rival.

The Ripple co-founder also warned that China’s dominant role in crypto mining means that “proof-of-work mining is controlled by China” and that Chinese miners are “under the control of the Chinese Community Party.”

Larsen, who describes himself as “radically pro-consumer” and has been a vocal advocate of financial privacy in California, added, “Miners are masters. They can rewrite history if they want. They can block transactions.” 

Ripple could be packing its bags

Larsen said he was so frustrated by the American regulatory environment that his San Francisco-based technology company, which is best known for its XRP crypto, may relocate to a friendlier jurisdiction.

He said nearly every other country in the world is a more hospitable regulatory environment for crypto than the US, but identified Britain and Singapore as the most likely destinations if Ripple packs its bags.

Read: Why China’s digital yuan is ‘a dictator’s dream’

Read: Global hash war ‘will send bitcoin to $500K’

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