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China is set to benefit from “restrictive” crypto rules in the U.S. that are “inadvertently” driving innovation offshore, Coinbase CEO Brian Armstrong wrote in an editorial published by MarketWatch on Tuesday.
“The U.S. and other democratic nations are up against digital systems promoted by an ambitious adversary, China,” Armstrong wrote, mentioning the Alipay and Tencent payment systems.
“With the recent launch of its digital yuan, China aims to directly challenge the U.S. dollar and its role in global commerce.”
Armstrong said it should come “as no surprise” that Hong Kong has been positioning itself as a new crypto hub. His comments came amid a flurry of speculation that China could be warming to the sector after state broadcaster China Central Television broadcasted a segment about cryptocurrencies that featured the Bitcoin logo earlier this month.
While the country prohibited the use of cryptocurrencies in 2021, it released a web3 white paper to promote the industry’s development earlier this month, according to reports.
Hong Kong’s Securities and Futures Commission, meanwhile, last week released conclusions about proposed regulatory requirements for virtual asset trading that are set to become effective on June 1.
“It’s not only China that can see the possibilities,” Armstrong wrote. “Crypto, like the internet before it, has the potential to modernize finance.”
Coinbase, in a long-running dispute with the U.S. Securities and Exchange Commission over its desire for new crypto rules, has been taking its public outreach to the public, running a new TV ad in Washington, D.C. in which Armstrong said he worried the U.S. could face a national security issue like it saw after many advancements in 5G technology and semiconductors were offshored.
“It’s important for American technology leadership and national security that this industry be built (at least in part) in America,” Armstrong wrote. “If we fall short today, the next generation of Americans will pay the price.”
