During a virtual panel with the Aspen Security Forum, Brad Garlinghouse stated that despite the SEC lawsuit, 2021 had been a record-breaking year for Ripple, except in the United States, where they only managed a single partnership.
The lack of regulatory clarity is causing American financial structures to fall far behind their international counterparts in the blockchain space. Brad Garlinghouse indicated that the majority of Ripple’s hiring is now done outside of the United States. Due to regulatory encumbrance, the US risks being excluded from participation with a decentralized ledger birthed within its borders.
In stark contrast, Sigal Mandelker indicated that the Chinese, in addition to developing their own state-sponsored cryptocurrency, have been facilitating an explosion in talent hiring in the blockchain space.
Countries like Singapore and the UK are all diving headfirst into the crypto pool. The cryptocurrency industry is thriving almost everywhere except the United States, which appears to have entered a period of self-imposed technological isolationism.
Sigal Mandelker argued that the lack of regulatory clarity has severe national security implications. Indeed, the United States may find itself ostracized from the burgeoning cryptocurrency market as blockchain companies route around American financial structures to avoid haphazard and nonsensical lawsuits by regulators like the SEC.
If America wants to maintain its power over global financial markets, it needs to provide regulatory clarity, as it did with the internet. If it fails to do so, the United States may emerge one day from self-imposed crypto lockdown to find itself decades behind the rest of the world in the digital asset space.
“Here is a massive industry that I believe without question will underpin the future of our financial systems, not just around payments where Ripple primarily works today. In my judgment, you’re dealing with an alcoholic who doesn’t want to admit they have an alcohol problem. To say that we have certainty, we have clarity, is like the alcoholic saying, I don’t have a problem. This is the elephant in the room. If we don’t address this, we’re going to fall further behind.”– Brad Garlinghouse
America’s regulatory floundering isn’t strictly an irrational position. American government structures currently enjoy the power that comes from the dollar being the world’s global reserve currency and no doubt wish to maintain that status in the face of technological innovation. The desire for things to remain the same can be a powerful one, particularly for legacy financial structures.
The danger to American power and prestige comes from the fact that American regulators cannot enforce their technological phobia on the rest of the world. Rivals like China are innovating quickly, and the United States may one day wake up to find a digital Renminbi has stolen primacy.
As far as innovation is concerned, it’s always better to be at the forefront of technological change than to be the one dragged forward by the relentless march of progress.
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