In the 19th century, few economists imagined that the dollar would make the pound the world's major currency in the next century. Most people cannot foresee how US banks, companies and US foreign policy can push the global economic order to the next millennium. The primacy of the dollar allows US policymakers to deploy financial coercion and economic sanctions tools to promote US national security interests, not just diplomatic and military actions. For decades, American rivals have been trying to evade and undermine this power, but without the passage of the US-led global financial system, there is no way to conduct major international business activities. However, new pipelines are being built.
Efforts are being made around the world to establish new traditional value systems that operate outside the traditional banking infrastructure. Bitcoin eliminates the role of traditional banking by enabling users to send non-replicable digital assets to another person without a middleman.
- French Finance Minister: France will prevent Libra from doing business in Europe
- Getting started with blockchain: Iceberg commission for big deals, find out
- Forbes: What challenges will cryptocurrency regulators face?
- "Large Case" tells you the truth about cryptocurrency hedge funds
- Report|The annual growth rate of trading volume is over 130%, and the potential of the African cryptocurrency market is huge.
- New York State Department of Financial Services (NYDFS) establishes research and innovation department to oversee cryptocurrency business
All transaction records will be stored in an immutable distributed ledger called a blockchain, which is open source and free. Blockchains are becoming more popular in the US, cryptocurrency startups are evolving, and some large financial institutions are using blockchain technology to improve payment efficiency.
At present, the blockchain platform is still in the experimental stage, which is smaller than the traditional financial system, but they are developing rapidly. Blockchain technology may bring about dramatic changes in the world's financial system, and its existence will enable US rivals to operate the entire economy outside the US-led financial system for the first time. Therefore, these governments use blockchain technology as a key component in their fight against US financial power.
Russia, Iran and Venezuela have launched blockchain technology trials, with leaders using the blockchain as a tool to offset US financial coercion and increase sanctions resistance. China has also been vigilant against the financial forces of the United States and the threat of sanctions against Chinese officials.
The efforts of these four countries are not just sanctions evasion, but often characterized by sanctioned entities hiding or concealing commercial and financial operations in order to continue to operate within the global financial system. Instead, these countries are trying to reduce the effectiveness of unilateral and multilateral sanctions by developing alternative payment systems for global business. It is worth noting that, especially in China, Iran and Venezuela have restricted citizens' access to existing cryptocurrencies when exploring the development of state-supported digital currencies.
Blockchain sanctions are a long-term strategy for US rivals. The blockchain platform currently in operation cannot support the number and speed of financial transactions through traditional banking systems. Most importantly, as blockchain companies currently rely on real-world legal tenders and traditional bank accounts, the current US sanctions pressure can cover companies in the cryptocurrency and blockchain technology sectors.
However, the influence status of the United States is not necessarily permanent. Blockchain technology has created a potential path for other financial value transfer systems beyond US control. It may be twenty or thirty years, but these participants are now developing building blocks. They envisioned a cryptocurrency technology that could help them destroy the world of American financial power, and they could make the dollar eclipse like the pound. Therefore, Washington must understand the benefits and threats of new financial technologies, maintain the integrity of global finance, foster expertise and influence, and lead the industry as a leader in the international cryptocurrency competition.
Venezuela’s national cryptocurrency experiment under the Maduro regime has been a disaster. Petroleum coins are more about propaganda work than technical or financial achievements. The Maduro regime has not established an economic or technological infrastructure to enable oil coins to be used by citizens and international trading partners. The US sanctions and Maduro’s wrong decision led to the failure of the oil coin. However, the oil coin experiment gave other regimes an idea of how to use the blockchain to counter the US sanctions.
Russian financial institutions are launching multiple blockchain technology projects to float corporate bonds and hold digital assets on new deposit platforms. Given the legislative and regulatory barriers, it is unlikely that cryptocurrency will be legally traded in the short term, but the Kremlin is seeking to develop a number that can be used to trade with regional partners and like-minded governments outside of SWIFT's financial information system. currency.
The Iranian Central Bank is actively developing tools to replace SWIFT, especially after Washington’s withdrawal from the Iranian nuclear agreement in 2018. Tehran is investing in blockchain pilot projects and promoting blockchain technology education at the university level. Russia has always been a strong ally of the blockchain resistance program. Iran has adopted a gradual approach, with several blockchain pilots working with Iran’s private technology sector.
China is less threatened by US sanctions than other rivals, but replacing US influence in the global financial system is a national priority. China's central bank is investing significant resources and expertise in blockchain research and digital currency development. China's participation in the blockchain payment system may be the biggest variable in the work of sanctions resistance. China's accession will change the rules of the game if it involves moving its transactions to a blockchain platform outside of the traditional system.
Blockchain will become an important weapon against US sanctions
One opponent in the United States persuaded other countries to use state-based digital currencies to counter US major commodity export trade, such as oil.
Independent cryptocurrencies such as Bitcoin are widely used in business and are closely related to the global financial system. Then, American rivals began to build large reserves in the cryptocurrency. As a result, the state uses its assets to gain more influence in the global financial system.
When planning to create state-based digital currencies, US rivals have made progress in developing digital currency wallet infrastructure. The country has developed a country-based digital wallet system where citizens and foreigners can hold and trade digital currencies and use them for transactions with domestic companies.
US rivals have used blockchain technology in their domestic banking systems to achieve sufficient success, exporting their platforms to other countries to integrate into their financial sectors.
Definition and scope of research
Digital currency or virtual currency, a term that is used interchangeably herein to refer to a number that can be traded or transferred electronically and used for payment or investment purposes. A cryptocurrency is a digital currency created using blockchain technology in which a network of independent computer nodes acknowledges transactions through a decentralized consensus mechanism. These transactions are protected using validated public and private key cryptographic protocols that protect both digital accounts and individual transactions that are posted to the distributed ledger, also known as blockchains. The cryptocurrency is sometimes referred to as a token.
Blockchains can be public and non-privileged, meaning that any computer node can connect to the network to confirm and verify transactions. For example, the Bitcoin and Ethereum protocols are well known public chains. There are also private, allowed blockchains in which the central authority or alliance determines the nodes in the network. The licensed blockchain can use all aspects of the public chain and adapt it to the private blockchain network. Most public chains have cryptocurrency tokens to motivate participating networks. Private blockchains usually do not require a token.
This report looks at a range of digital currency technologies used by major US competitors. For example, Venezuela’s Maduro regime tried to introduce public cryptocurrencies, and the sanctioned Russian banks are developing licensed blockchain networks, while some Russian politicians are also promoting encrypted rubles. Iran is investing in multiple blockchain projects, including the use of unrestricted blockchain software, which is adapting to the final state digital token. China's goal is to develop its own digital currency and is researching and investing in blockchain and cryptography as it evaluates ways to incorporate technology into future digital banks based on central banks.
Venezuela: Failure to initiate lessons for others
President Nicolas Maduro tried to establish a sovereign cryptocurrency. Although the project was widely publicized around the world early on, it ended in failure. From the beginning, the US Treasury Department pointed out that President Maduro hopes that "the oil coin can help Venezuela bypass the US financial sanctions."
The oil coin seems to be only a poor quality propaganda tool without any technical or economic utility. However, Iran, Russia and even China may learn from Venezuela's mistakes. Although the ultimate fate of the oil coin is closely related to Maduro’s efforts to maintain governance in the face of continued humanitarian crises and international pressures, its failure is a case study that countries need in order to create a viable national cryptocurrency. .
Venezuela is facing political turmoil and US economic sanctions and hyperinflation. The socialist regime in Venezuela announced the introduction of a national cryptocurrency to compensate for its economic woes. Maduro announced the first plan for a petroleum coin in a television broadcast in early December 2017 at a price of a basket of commodities, including oil, natural gas, gold and diamonds. In January 2018, the Maduro regime issued a white paper claiming that the initial valuation of the oil was $60 per piece, based on the estimated oil price at the time.
Before the release of the oil coin on March 20, 2018, Maduro claimed that the government had raised billions of dollars as part of the initial token release. However, this amount does not match the value of the initial token in circulation, which indicates that the token has never entered commercial circulation. Six months behind schedule, the government allegedly launched a coin on October 1, 2018, and created a blockchain browser site that shows records of oil currency transactions, but is unclear about the source of the underlying data. No transactions were recorded until October 13, 2018.
Maduro’s initial announcement stated that the oil coins will be issued based on Ethereum. However, in February 2018, the white paper stated that the token was built on the NEM blockchain. The white paper was completely revised in October 2018 and outlined a completely different software protocol. It seems to have copied another name called Dash. Code. At the time, Dash was very popular in Venezuela.
Although the oil coins boasted, the government failed to integrate the token into any of its domestic financial operations. During 2018, the regime repeatedly claimed that oil coins would be used to pay for various domestic transactions, such as real estate, air tickets and tourism. None of these promises have been fulfilled.
For the rushed cryptocurrency, the Maduro regime launched a global promotion that did not establish any support for the commercial infrastructure and could give it any value. There is no obvious pilot test for petroleum coins, and there is no public agreement with commercial entities to accept petroleum coins as a form of payment.
Venezuela also failed to convince its trading partners to accept oil coins. The Minister of Foreign Trade said in April 2018 that Venezuela might use oil coins to buy Russian-made heavy trucks, but in December 2018, the Russian Deputy Finance Minister stated that Russia does not intend to use token trade with Venezuela. He added that although Russian financial officials have already understood how oil coins work.
An Indian news media reported in April 2018 that if India used oil tokens to buy Venezuelan oil, Venezuela would offer a 30% discount. A few weeks later, the Indian Foreign Affairs Minister told reporters that the Bank of India banned the use of oil coins for any transaction.
The Turkish Foreign Minister told reporters in September 2018 that Ankara believed that the oil coin was a legal payment method and pointed out that "we can use petroleum coins, and we are happy to do so." However, since then, the Turkish government and Its economic institutions did not express their willingness to use petroleum coins for trading.
At the same time, there appears to be no online currency on the cryptocurrency exchange outside Venezuela. The threat of US sanctions is not the only deterrent. In a reported case, the head of the Colombian exchange rejected the on-line oil coin because the Maduro regime required the Venezuelan government to fully access and control user data. The regime's authoritarianism and distrust are incompatible with exchanges that prioritize customer privacy and data integrity.
Russia: Seeking a perfect storm of blockchain resistance against US sanctions
Moscow is giving priority to blockchain technology as a long-term economic and national security goal to mitigate the effects of US sanctions and diversify its foreign exchange reserves. Russia’s political leadership has promoted trade and investment outside the global financial system headed by the United States.
Russia has a highly active and relatively mature blockchain technology business community and a central bank that encourages its financial institutions to conduct distributed ledger technology trials. Russian financial institutions are experimenting with multiple blockchain projects and seeking to develop strategic advantages. As a Russian intelligence official said at the International Blockchain Standards Conference in 2017, “The Internet belongs to Americans, but the blockchain belongs to us.”
Russia’s focus on the blockchain has changed dramatically in recent years, and Russian-level talks on cryptocurrencies can be traced back to 2015, but only to the private sector. In 2015, Russian payment companies Qiwi and Webmoney submitted a national digital currency proposal to the Russian Central Bank, but the bank rejected the proposal. However, in the second year, Duma member Andrei Lugovi pointed out that cryptocurrencies can help Russia avoid US and EU sanctions.
In the next three years, other Kremlin officials have supported Russia's establishment of a national cryptocurrency or blockchain-based financial system. Although President Vladimir Putin initially opposed the national cryptocurrency, he eventually acknowledged the need to better understand the technology to "avoid various restrictions in global financial trade."
The blockchain's transformation of the financial sector may take decades, but the Russian National Security Service (NSD) is now laying the groundwork for this. NSD provides securities and cash settlement services to the country. In mid-2018, NSD launched a pilot project in which a large Russian real estate management company assisted Sberbank, the country's largest bank, in issuing shares in the form of digital tokens. Sberbank is currently sanctioned by the United States and the European Union, limiting its ability to raise funds internationally. A few months later, NSD partnered with Sberbank through the blockchain platform to help MTS, Russia's largest telecommunications company, issue $12 million in corporate bonds. A Sberbank executive said, "Our joint blockchain project with NSD and MTS is just the beginning, and in the next 5 to 10 years, blockchain-based products and services, including smart contracts 37 in the blockchain Based on the standard."
NSD also formed a consortium, and the blockchain companies in Japan and Switzerland and the Central Security Depository of Slovenia jointly created a distributed digital storage platform called D3 Ledger. According to reports, the platform provides custody and banking, asset management digital asset settlement, and other central security deposits. Essentially, it provides a way to store and trade cryptocurrencies, as well as ways to track traditional asset ownership by "marking" them on licensed distributed ledgers. D3 Ledger software is also based on the form of Hyperledger, a free open source blockchain platform.
At the same time, national financial institutions are using Hyperledger, Masterchain for testing and other blockchain protocols for a wider range of commercial uses, using blockchain applications to more effectively provide existing financial services. Most of the banks involved in the pilot project are subject to sanctions by the United States and the European Union.
At the same time, the Bank of Russia expressed its strong support for the development of blockchain systems for the banking industry. However, at present Russia lacks a legal framework, and regulators and technical requirements immediately formulate relevant cryptocurrencies for “cryptocurrencies combined with their financial systems”.
In addition to the domestic blockchain program, Russia has also become a promoter of other countries that want to experiment with blockchain technology, especially those seeking to mitigate the effects of US sanctions. As sanctions impede the ability of the Russian banking industry to trade new debt and attract foreign direct investment, new forms of cooperation with foreign partners are needed. To achieve this goal, Moscow needs to be able to transfer value across borders through parties using digital currency or blockchain technology platforms.
The deputy governor of the Russian Central Bank announced in April 2018 that she was considering using Masterchain to establish a new system to transmit payment information from SWIFT's global financial messaging system. The new system is dedicated to countries in the Eurasian Economic Union (EAEU). In addition, in December 2018, the Russian Ministry of Finance announced that due to US sanctions impeding the business of local companies, it plans to coordinate the development of regional digital currencies with other members of the EAEU. However, it indicates that the digital currency is likely to be developed without blockchain technology, probably due to the ability of the blockchain to handle large volumes of transactions in the short term.
Russia has also explored the potential of blockchain technology through joint efforts with members of the BRICS. In 2016, NSD signed a Memorandum of Understanding (MOU) with China Securities and Depository Clearing Corporation to collaborate on financial technology research, including the use of blockchain technology. In August 2018, the major development banks of the BRICS countries signed a memorandum of understanding to jointly study distributed ledger technology. Elina Sidorenko said in January 2019 that the BRICS initiative has made more progress than the EAEU program. Sidorenko emphasized the importance of this initiative to Russia and added that “if the invention of a cryptocurrency is only allowed to pay for energy, the Russian Federation could have made long-term economic progress.” Russian officials are particularly interested in establishing an energy source. A system for fast billing and receiving funds in the industry.
When Venezuela announced its attempt to introduce oil coins in February 2018, details showed that Russian technology entrepreneurs, possibly guided by Putin consultants, were helping the Maduro regime to develop digital tokens supported by its state. When the Maduro regime announced the launch of the oil coin, it asserted that the founders of two relatively unknown technology companies had a Russian resource background that would help the project. However, after the Russian government publicly denied participation in the implementation of the oil coin, the Russian technology company that had to cooperate should appear to have been shelved.
At the same time, Russia-based Evrofinance Mosnarbank became the leading foreign financial institution for petroleum coins as a recognized currency. In March 2019, the Ministry of Finance approved Evrofinance to use its offices in Russia and Venezuela to implement sanctions mitigation plans to enable foreign investors to obtain oil coins.
Iran also seeks to work with Russia and other countries to use blockchain technology as a replacement for SWIFT. In May 2018, the Chairman of the Economic Affairs Committee of the Iranian Parliament met with the Chairman of the Economic Policy Committee of the Russian Federation in Moscow to discuss the use of digital currency to avoid sanctions and transactions. Officials plan to hold meetings in the future to discuss inter-bank cooperation. The Iranian official told the media that "if we can promote this work, then we will be the first countries to use digital currency to trade goods."
In mid-November 2018, Iranian blockchain laboratory personnel participated in a joint meeting between Armenia and the Russian Encryption Industry, Block Chain Association (RACIB) and the Armenian Blockchain Association. The parties signed an agreement to cooperate on distributed ledger technology. The RACIB press release stated that it will provide advisory services for the implementation of blockchains in Iran and a regulatory framework for Iran's cryptocurrency industry. The RACIB chairman vowed to help Iran meet the sanctions challenge.
Iran: the main force to use the blockchain to resist sanctions
In the face of 40 years of US sanctions, Iran has developed a wide range of evasion networks and methods. Even so, the United States has proved that it can still exert tremendous pressure on Iran by cutting off the global financial system. SWIFT broke contact with more than 20 Iranian banks in early November 2018. US sanctions have affected Iran's ability to export crude oil, resulting in a daily low of 500,000 barrels per day. Iran is also facing a continuing inflation challenge, reaching a peak of 51.4% in March 2019. The deep recession of the economy, Iran's record inflation is pushing Iranian citizens to trade in their less volatile currencies.
Blockchain technology provides Tehran with the opportunity to build new financial infrastructure that is not affected by Washington sanctions. While recognizing that blockchain technology may help Iran to evade sanctions, Ali Divandari, head of the Iranian Monetary and Banking Institute in January 2019, is also the target of US sanctions, saying that “blockchain can really Revolutionizing the concept of money.” Divandari also asserted that the technical separation of blockchains from traditional bank payment systems can theoretically protect them from US sanctions.
The emergence of the Swedish blockchain startup Brave New World Investments in early 2017 also sent a warning to Iran to use blockchain technology to circumvent US sanctions in order to promote European investment in Iran through Bitcoin. The company acquired Bitcoin investors and plans to convert them into shares of local companies purchased by the Iranian Rial on the Tehran Stock Exchange. However, the Swedish bank refused to let Brave New World open an account because of concerns about the second sanctions imposed by the US financial authorities. Therefore, the company operates purely from its digital currency holdings. A year later, after the Central Bank of Iran (CBI) temporarily banned cryptocurrency transactions, Brave New World suspended Iran's investment plan. According to the company, it did not invest even before the official ban because the company was not sure whether the use of cryptocurrencies would be banned in the country. It is worth noting that the Iranian government's regulation of blockchain technology was uncertain at the time, which was an obstacle to the business of Brave New World, rather than the lack of a Swedish bank account.
CBI is investing in blockchain technology infrastructure. With the support of CBI, Sharif University of Science and Technology established the Iranian Blockchain Laboratory (IBL) in 2017. Sharif appears to be the center of blockchain education in the country, and his lab is responsible for blockchain technology research, consulting and education, and has hired several European blockchain experts as external staff. IBL regularly holds seminars on cryptocurrency and blockchain technology. Speakers typically include professors and graduate students from other Iranian universities, covering topics ranging from the basics of cryptocurrency mining to how the blockchain enhances Iranian payment systems.
According to reports, CBI also signed a 2018 agreement with Iran's vice president of science and technology and Iran's OTC stock exchange management agency Fara Bourse to develop financial technology (fintech) and cryptocurrency. The accompanying announcement stated that the government will bring together experts and financiers to guide Iran's progress in the development of blockchain, and cryptocurrencies can promote international trade. A few months ago, the Vice President announced support for the development of private cryptocurrency and pointed out that there should be at least "at least one Iranian product" in the digital currency field.
Tehran also announced at the end of July 2018 that it is developing a national cryptocurrency to offset the impact of the upcoming US financial sanctions. Official Iranian media reported that the country has established a major element of cryptocurrency tokens that can be used for domestic bank settlement transactions. At the time, several Iranian technology companies were working with the central bank.
In August 2018, CBI announced that it would issue Iran's sovereign cryptocurrency. The implementation plan will involve two phases: in the first phase, the token will only be used for domestic interbank payments; in the second case, it can be used for a wider range of retail payments. The ultimate goal of Tehran's use of blockchain technology is to help promote international trade outside the traditional banking system.
In Iran, several projects related to foreign trade are underway, and the construction of a new pipeline for the Iranian banking industry seems to be the focus. A project called Borna was developed in collaboration with CBI and Informatics Services Corporation, which is the payment system for the Iranian Development Bank. CBI has partnered with Informatics to fund Arataak, an Iranian blockchain startup. Media reports indicate that the team from Areatak is developing an identity verification system within the Informatics Office as part of the Borna project. The Borna project uses Hyperledger to create a private blockchain platform that runs without cryptocurrency mining. In fact, mining is unnecessary because the central bank will control and distribute this national figure or wave.
There is also a separate project led by Iranian startup Kuknos. Kuknos is developing a gold cryptocurrency called Peyman, which will initially be used by four Iranian banks to digitally mark real-world assets. Three of the four banks were sanctioned by the United States.
The Peyman token is built on top of the Stellar blockchain protocol. The Stellar system is an open source blockchain for creating payment infrastructure. Although the Iranian government has not officially approved Peyman, Kukonos has signed several memorandums of understanding with various government technology and financial groups.
Unlike the Maduro regime in Venezuela, the Islamic Republic of Iran did not first create a national cryptocurrency and then promoted it; instead, it is pushing pilot projects to determine how the blockchain-based system actually works. These projects may provide a reference for the design and management of Iran's ultimate sovereign cryptocurrency.
In January 2019, the Central Bank announced that it would become the exclusive entity to operate the national cryptocurrency and future “regional cryptocurrency”. At the same time, the head of the Iranian Trade Promotion Organization said that “Iran is negotiating the use of cryptocurrencies in financial transactions with eight countries”, which is part of its “avoidance of US-led sanctions”. The eight countries are Austria, Bosnia, Britain, France, Germany, Russia, South Africa and Switzerland. It is reported that all these countries sent representatives to Iran to discuss the work. However, these negotiations have hardly been confirmed and there are no other details about the Iranian plan.
China: Potential changers in resisting sanctions
Among all US rivals, China is best able to develop a blockchain-based digital currency infrastructure to compete with the dollar-based financial system. China is the most technologically advanced US rival pilot blockchain technology. It has the largest economy that has the greatest impact on global trade.
China's goal is to replace the dollar as a global reserve currency, but the illiquidity of the renminbi has weakened its appeal. Digitizing the renminbi, if it is easier to obtain, holdings and cross-border spending will help promote trade with Chinese companies involved in the multi-billion dollar Belt and Road initiative. Beijing is developing digital currency and incorporating blockchain technology infrastructure into its financial sector. Beijing has long studied the central bank's cryptocurrency, but its strategy is conscious, coordinated, and consistent with the economic and political vision set in 2050.
China's large population has become accustomed to cashless payments, and with the development of cryptocurrencies, China is well prepared to accept the central bank's digital currency. In January 2019, Chinese Internet regulators said that China's blockchain platform must require user identification, review content and store user data.
Since 2014, the People's Bank of China (PBOC) has been developing a digital currency strategy. China does not intend to use or copy an independent cryptocurrency such as Bitcoin. The goal is to adopt blockchain technology more widely and issue digital currencies that are centrally controlled by the government. The central bank's goal is to ensure that digital currencies serve their capital controls and broader monetary policies.
The Governor of the People's Bank of China announced in 2016 that digital currency is inevitable for China, and once it is announced, it may coexist with cash in kind until hard currency can be circulated. In 2016, the Vice President of the Central Bank proposed that digital currency will “reduce operating costs, increase efficiency, and achieve a wide range of new applications”. He publicly suggested that the central bank distribute digital currency to commercial banks, and commercial banks would then send tokens into the economy. In the second year, the bank established the Digital Money Institute (DCRI) and publicly recruited cryptographers with blockchain experience. In October 2018, a research team of the People's Bank of China published a report analyzing the potential economic impact of the cryptocurrency “stabilized currency” trend.
DCRI is first committed to building blockchain technology capabilities at the provincial level as the basis for digital currency connectivity in China's broader economy. By the end of 2018, DCRI established financial technology centers in Shenzhen and Nanjing to develop blockchain technology products and systems for banks, universities and research institutions. More broadly, China is developing Shenzhen and Nanjing into technological innovation centers that compete with Silicon Valley.
The People's Bank of China and municipalities are running multiple blockchain pilots, particularly credit, trade finance and real estate projects.
China is also experimenting with blockchain platforms for securities trading. China Securities Depository and Clearing Corporation, in cooperation with Shanghai Zheshang Bank, issued a $66 million blockchain-based asset-backed securities in 2018. In January 2019, Yao Qian, general manager of China Securities Depository and Clearing Corporation, wrote a detailed article on bitcoin, the benefits of blockchain, and the future development of cryptocurrency technology.
Written at the end
While a viable and scalable blockchain-based alternative to financial infrastructure will take decades to develop, countries now engaged in research and development will shape the future of innovation. In the long run, blockchain technology can significantly save costs and increase transparency. As US Federal Reserve Director Lael Brainard said, “Even if cryptocurrencies play a very limited role in the future, the technology behind them is likely to continue to exist and improve the way we transfer and record more traditional financial assets.”
If banks in the above countries are better than the United States in the development of blockchain, US financial policymakers must now consider the risks of US competitiveness. There is now an opportunity to integrate blockchain technology into the broader financial system, but successful approaches can only be achieved through pilot projects, research, investment and policy discussions. For banks with the most forward-looking cryptocurrency and blockchain, banks outside the US are likely to be able to best respond to changes in consumer and technology demand. Because these American rivals have strong political motives in the development of blockchain technology, the United States faces the risks brought about by the transformation of earthquake financial technology.
While some US financial companies, and even SWIFT, are experimenting with blockchain applications, the US financial sector has fewer short-term incentives to build new remittance systems than those that want to escape or replace US financial power. If the US financial system is to remain competitive, US financial stakeholders need to stay ahead and shape the financial technology curve. This requires more than just viewing blockchain innovation from a distance. As the global financial system develops, US policymakers need to ensure that US companies and think tanks are also leaders in the blockchain arena. (chain to finance)