“We must take blockchain as an important breakthrough for independent innovation in core technologies, clarify the main directions, increase investment and accelerate the development of blockchain technology.”
Those are not my words. That’s Quote from 2019 Chinese President Xi Jinping. And since then, China has certainly listened to his calls.
The promotion of blockchain innovation has been officially incorporated into China’s latest five-year plan. China has also developed a blockchain service network. This is a “one-stop shop” for businesses and governments to deploy blockchain-based applications to the cloud. And just as importantly, they train the workforce needed to make these efforts successful, and recently launched a national blockchain research centre aimed at training 500,000 blockchain experts.
This is calm news for America, as blockchain can change every aspect of our society. Most of us are familiar with blockchain because of its role in promoting cryptocurrency trading, but this is just the number one case of many. The fundamental concept of blockchain is the creation of an immutable distributed ledger that can track and record transactions and data without external supervision. From self-executing “smart contracts” to tracking physical shipments with unprecedented transparency, blockchain is about to revolutionize how the world does business.
If China succeeds in controlling the underlying infrastructure behind these innovations, the Chinese Communist Party can have an unprecedented impact on the global economy. When the internet took off in the 1990s, we couldn’t imagine how much it would change our lives. But fortunately, American innovators were at the forefront of that revolution. This is the reality that we continue to pay dividends to our country to this day.
The good news is that China’s leadership is not pre-defined. On the contrary, American blockchain entrepreneurs still lead the world as they face tough competition with the US for all Chinese investments.
One of the questions I asked most frequently in my role as a top Democrat on the House Selection Committee on Strategic Competition between the US and the Communist Party of China is whether we can beat it. My answer is, for many reasons, “Yes!” America brings many benefits, but the main one of them is our ability to embrace our innovation, disruptive technologies and responsibly regulate those technologies in ways that protect society.
This three-part formula is a recipe for American success, and the blockchain itself fits neatly into this pattern. In fact, scientists Stuart Harbor and Scott Stonetta have discovered the basic foundations of American blockchain in nearly two decades when Nakamoto Atoshi turned it into a Bitcoin code.
American companies are also one of the most innovative users of blockchain technology. Create tools to do everything from fighting deepfakes to creating a trackable supply chain.
Our responsibility is to continue to develop responsible blockchain regulations, including the most immediate in regards to cryptocurrencies, so that the United States remains home to the deepest and most transparent markets around the world.
Just as we did when excelling in traditional stocks, bonds and futures, we need to build towards a deep, liquid, fair and transparent market for our digital assets. So I supported FIT21 ACT last year. The centrality of traditional financial markets is key to national security, and this victory model must be replicated for cryptocurrency.
Our interests were not high because of both the prosperity of our country and our values.
The beauty of blockchain is based on the power of decentralization, but China wants to turn the purpose of blockchain into its mind and use it to concentrate its authority with the Chinese Communist Party. This explains why China has tried to ban cryptocurrencies that it has no complete control despite accepting many uses of blockchain.
The parties want to use blockchain as a tool for monitoring or as a potential means of weaponizing international payment systems for dollars. It is not so eager to accept use that could threaten its own authority. Let’s use the fear of decentralization towards them.
Chinese Communists have no answer to America’s proven strategies for innovation, disruption and responsible regulation. If we embrace the opportunity to lead blockchain innovation and do so in a responsible way, we can protect our prosperity and safety for the next generation. But if we don’t, we will give the fields to our enemies and be left behind.
Blockchain can be a component of something great. Whether we seize an opportunity or hand it over is up to us.
Raja Krishnamoorthi serves as a ranking member of the House Selection Committee on Strategic Competition between the US and the Communist Party of China.
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