- Chris Larsen, the co-founder of Ripple, has warned that the U.S is “fighting an economic and technological cold war against China”
- Larsen warns that the U.S. is at risk of losing its financial dominance if it fails to adopt new technologies such as blockchain
- China is increasingly looking able to control “important parts of a new global financial system”
Chris Larsen, the co-founder of Ripple, has warned that the U.S is “fighting an economic and technological cold war against China” that will shape the future of finance. Writing in The Hill, Larsen notes the importance of China’s move to a blockchain-based financial system and warns that the dollar faces losing the hegemony it has held for some 80 years if the country doesn’t keep up – and so far it’s doing a terrible job.
Larsen – “Fundamental Change” is Upon Us
Larsen’s piece warns of a “tech cold war” between the U.S. and China that threatens America’s global economic leadership, which has stood ever since the conclusion of the Second World War. Larsen says that with so much attention on Artificial Intelligence and the battle for 5G supremacy, the question of who will control the future global financial systems has been almost forgotten – at least in the US.
Following decades of dollar dominance, Larsen warns that “a moment of fundamental change is upon us” with China leading the way in overthrowing the antiquated financial systems on which American dominance relies with new ones based on blockchain technology.
America is Lagging in FinTech Race
While China has almost universally adopted a cashless digital system through Alipay and WeChat, paper money in the form of cash and checks are still predominant in much of the U.S. This is in itself evidence of how China is thinking toward the future while America is stuck in the past, a theory reinforced by China’s imminent launch of a digital yuan, which could potentially move the entire country’s economy into the blockchain. Such a move is unprecedented and illustrates the difference in attitude between the two nations.
China is not just satisfied with keeping their blockchain initiatives in-house, Larsen warns, stating that the country is engaging in “a powerful multinational effort to spread these technologies cross-border, including to key U.S. allies”. America, by contrast, is “woefully behind”, with the kind of blockchain and cryptocurrency platforms that have been adopted in China being met with a “mostly hostile” response by U.S. lawmakers.
Ripple Founder in Good Company
Other notable individuals have shared Larsen’s assessment recently, in particular Tim Morrison, the former senior director for counterproliferation and biodefense for the National Security Council. Morrison warned that China’s desire to establish itself as the leader of the next financial revolution “should be alarming” and that a “digital makeover” of the dollar was essential if this was at all to be avoided.