Delay in U.S. National Digital Currency Could Benefit China, Says Circle CEO
Jeremy Allaire, co-founder and CEO of the digital financing conglomerate ‘Circle’ recently took the time to speak about the status of the U.S. and China in the global race of digital payments.
Speaking on the Global Coin Research podcast, Allaire expressed his disappointment at the way the U.S. government is treading behind China on cryptocurrency advancements.
Elaborating on his perspective, Allaire mentioned that the team at Circle has long believed that the significant fiat currencies of the world would eventually “become digital currencies.” The entrepreneur pointed to how this projection is coming true in the form of the Chinese government releasing its own, official cryptocurrency soon.
Circle CEO Elaborated on How China is Winning the Official Digital Currency Race
Allaire was quick to mention that the U.S. government isn’t doing much in terms of developing an official cryptocurrency of its own. This could ultimately change the way payment transfers are made on a global scale.
According to Allaire, this could mean that China could have a very effective way to make government-approved currency transfers all over the world, while the U.S. lags in meeting this requirement.
The entrepreneur went on to explain that this doesn’t only give Chinese individuals to make more comfortable money transfers throughout the world. But it also provides companies from the region to bypass the Western banking system and its regulations.
As a result, the Chinese yuan could end up having the edge over the U.S. dollar in terms of the benefits that it offers to transacting parties. In the long run, this could modify the process of how Western parties make global transactions.
He also went on to analyze how launching its cryptocurrency could be an effective way for China to introduce its yuan as an alternative to primary fiat options such as the U.S. dollar. As a result, this could lead the country to grow as a “trade counterparty.”
The entrepreneur pointed out that if the U.S. and the Western world must be on par with the global economy.
It must adapt to its changing models in the future.
As such, it is imperative for the country to start looking into developing its own digital currency.
Why Is It Important for the U.S. to Have Its Own Cryptocurrency
Ever since the cryptocurrency boom of late 2017, the adoption of digital currency has been increasing at an exponential rate. This is evident through various events in the financial and corporate world.
One of the world’s largest banks, JPMorgan Chase, is already looking into blockchain solutions and developing its own cryptocurrency. Whereas, social media giant Facebook has also announced its own cryptocurrency by the name of Libra, which would have associations with partners such as Visa, PayPal, and Uber.
On the other hand, those institutions which are not actively creating their own cryptocurrencies are either heavily invested into developing blockchain solutions or looking into backing companies that specialize in blockchain based services. A very relevant example here would be of Goldman Sachs, which is one of the investors in Circle itself.
Speaking of Circle, even the financial services firm has its own cryptocurrency that is pegged to the U.S. dollar. Apart from owning cryptocurrency exchange Poloniex, this is one of Circle’s more direct investments that offer services to the retail sector.
But launching their own cryptocurrency is not just limited to large corporations or financial institutions. Almost all major cryptocurrency exchanges now have their own digital currency, which makes the movement of funds easier for them while also adding to their stake in the overall cryptocurrency market.
The Benefits Offered Through Cryptocurrencies Make Them Very Beneficial
The development of digital currencies is gaining traction because they provide their holders with a sense of convenience and security.
With cryptocurrency, users get the ability to transfer payments to anyone in the world. They could also do so within minutes while only having to meet minimal regulations. Cryptocurrencies provide all of these benefits at a fraction of the price of a conventional money transfer.
All of this goes on to show that having an official digital currency is the only way for a country to offer the same benefits through its fiat currency. That is if it has to beat these new ventures that surpass the features of fiat currency quite easily.
The Current U.S.-China Trade War Makes It More Important for the U.S. to Have Its Own Cryptocurrency
The current U.S.-China trade war is an indication of how cryptocurrencies would play a more significant role to decide who comes out on top in similar tiffs in the future.
With the current tariffs imposed by the U.S. and the way that President Donald Trump is suggesting American companies to close their operations in China, the availability of a strong, national cryptocurrency could turn things around for China very quickly.
In a world where China has the upper hand with its digital currency, and the U.S. doesn’t, the negotiations for tariffs and the operation of American businesses in China may occur in a different manner.
To be equal with economies as strong as China, the U.S. must have some leverage in fintech advancements. With influential figures such as the Bank of England’s governor calling for a digital currency solution to dethrone the U.S. dollar, it is more important than ever for the U.S. to have its cryptocurrency.
That is why Allaire’s assessment holds so true to reality as well as future projections of how cryptocurrencies would play a significant role in deciding the next economic winner of the world.
The ZB Group’s Take
These events show that cryptocurrency is here to stay. The form might change over the years, but cryptocurrency and blockchain will continue to progress and make a significant impact over time. Simplifying processes is one way that blockchain will integrate into society.
The next critical aspect of the blockchain will likely be the acceleration of more macro factors that make people question traditional structures further. As noted by the Bank of England Governor, shifts are happening slowly, and technology is the accelerant.
ZB Group formed to take advantage and become a critical component of this emerging sector.
About ZB Group
ZB Group was founded in 2012 with the goal of providing leadership to the blockchain development space and today manages a network that includes digital assets exchanges, wallets, capital ventures, research institutes, and media. The Group’s flagship platform is ZB.com, the industry leading digital asset exchange. The platform launched in early 2013 and boasts one of the world’s largest trading communities.
Learn more about ZB Exchange by visiting www.zb.com.