Coinbase CEO: Restrictive U.S. Crypto Regulations to Benefit China the Most

Updated: 31 May 2023

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Brian Armstrong, Coinbase CEO, points out that a failure to provide regulatory clarity to the crypto industry in the U.S. will be beneficial to China. This comes days after the U.S. declined to incorporate new trading restrictions.

In an editorial published by MarketWatch on Tuesday, Armstrong stated;

“The U.S. and other democratic nations are up against digital systems promoted by an ambitious adversary, China.”

He further warns that while recent volatility in crypto markets may tempt policymakers in the U.S. to “write it off as an unstable asset class,” doing so could result in the United States losing its position as a financial leader and innovation hub.

Coinbase, on the other hand, has also requested clarification from the Securities and Exchange Commission (SEC) on which digital assets qualify as securities, arguing against the agency’s “regulation by enforcement” approach. SEC Chair Gary Gensler has previously discussed the fact that digital assets are subject to existing securities regulations.

For a long-running, Coinbase has been in dispute with the SEC over its desire for new crypto rules. It has, however, been taking its public outreach to the public. In a new TV ad in Washington, D.C., Armstrong expresses concern that the U.S. might face a national security issue similar to what it saw after many advancements in 5G technology and semiconductors were offshored.

Armstrong says,

“It’s important for American technology leadership and national security that this industry be built (at least in part) in America. If we fall short today, the next generation of Americans will pay the price.”

In today’s @MarketWatch I’m sharing an op-ed encouraging policymakers to see the big picture with crypto. It’s important for American technology leadership and national security that this industry be built (at least in part) in America. https://t.co/I1702aHDGf

— Brian Armstrong ?️ (@brian_armstrong) May 30, 2023

China is keeping an eye on the U.S. Recently, we saw China launch its digital yuan, which will directly compete with the U.S. dollar and play a role in global commerce.

Hong Kong as New Crypto Hub

Armstrong stated that Hong Kong’s positioning as a new crypto hub should come as “no surprise.” His remarks came amid speculation that China may be warming to the sector, following the broadcast of a segment about cryptocurrencies featuring the Bitcoin logo by state broadcaster China Central Television earlier this month.

“It’s not only China that can see the possibilities,” Armstrong stated. “Crypto, like the internet before it, has the potential to modernize finance.”

In 2021, Hong Kong banned the use of cryptocurrencies. However, the county lifted the ban in May 2023, releasing a Web3 white paper to promote the industry’s development. While many investors are still anticipating its official launch, scheduled to take place on June 1, Hong Kong is on standby, ready to take charge.

Brian Armstrong has urged policymakers to recognize that cryptocurrency is “about much more than individual transactions,” instead representing a “transformative technology” that has the potential to revolutionize a variety of industries. He adds that,

“Crypto, like the internet before it, has the potential to modernize finance and numerous other sectors, from supply chains to social media, by offering a faster, cheaper, more private, and accessible platform.”