The United States needs to adopt privacy-focused crypto-currencies to compete with China’s digital renminbi.
Electric Capital co-founder and managing partner Avichal Garg believes that the only way the U.S. can catch up with China in the digital currency war is by adopting privacy-focused cryptomonics.
According to Garg, China is already well ahead of the United States in the race for a digital currency, its DCEP, or Digital Currency Electronic Payment, is scheduled to be launched by the end of the year. That’s why developing a digital US dollar may not be enough to compete, given the long time it will take to develop it.
„The Chinese system […] will be on the market for 5 to 10 years before the United States launches its own alternative.“
Rather than develop its own product, Garg believes that the US government should support the initiatives of established dollar-based stablecoins such as USDT.
By relaxing the regulation around these stablecoins, which are fixed to the US dollar and under US jurisdiction, the US will be able to use them as substitutes in order to compete with China in the digital currency market and Bitcoin Future.
„In 12 or 24 months, I think they could basically give the green light to all these hybrid crypto dollars“.
Even so, Garg is convinced that it is possible that the United States will be defeated if it competes with China on the mere side of technology. Ultimately, to get competitive coverage, the United States needs to offer what an authoritarian regime like China cannot offer, which is a digital currency focused on privacy and resistant to censorship.
To achieve this, the United States should join forces with the cryptocommunity and enhance those crypto-currency networks that encode democratic values.
„The best option for them (the United States) to compete is to adopt the best features of crypto currencies and really push them as a kind of offensive tool against the Chinese“.