Crypto policy can protect the dominance of the dollar

If the United States wants to maintain its economic and political leadership in the twenty-first century, the only thing it cannot do is lose control of the mondial arena.

That was the découvert commission that emerged from the House Financial Charges Committee’s September 20 hearing on the citoyen security implications of the increased use of virtualité payment systems.

Describing payment systems as “the lifeblood of the financial sector,” MP. Josh Gotheimer (DN.J.), sensualité of the Subcommittee on Citoyen Security, Cosmopolite Development, and Monetary Policy, warned that “allies and adversaries alike are taking decisive steps to remove the dollar from their economies, to develop new methods to facilitate cross-border money transfers and to control the plumbing of ordinaire acquitté.” .

As a result, he added, “In the coming years, ordinaire leadership in the 21st century will be determined in élément by the oversight and bruit of the payments sector.”

The hearing was dominated by a chicane of axial bank quantitatif currencies (CBDCs) – most notably the Chinese electronic yuan, or quantitatif yuan, and the US quantitatif dollar – and cryptocurrencies.

Monkeys are growing

But it would be a mistake to consider these as the only virtualité payment ecosystems (APEs), she said Scott Dweckya fellow focusing on this solution at the Wilson Center, a quasi-governmental think cuirassé.

Besides familiar systems like PayPal and Western Adjonction, there are Russia’s préférée alternatives like WebMoney, Perfect Money, WeChat Pay, China’s $45 trillion AliPay, changeant payment systems, remittance systems, and stored value card systems.

“Concentrating solely on cryptocurrencies risks misunderstanding this thriving ordinaire ecosystem,” Dwecky said. “I define this as an ecosystem parce que they are all connected through hundreds of virtual currency exchanges, transferring one virtualité payment system to another, or to and from,” often with anonymity, or know your customer from bad to nonexistent (know your customer ).

The popularity and viability of monkeys has exploded, woven into the ordinaire sociétal fabric… [providing] A growing and qualifié set of interconnected non-bank financial channels that may or may not touch the traditional financial system.

He added that this bank-focused financial system is seeing a shift in the ground beneath it, “as new Chinese and Russian payment systems bypass SWIFT and a Western-dominated financial backbone. [that are] It is no border a domain for fintech startups and is not just limited to cryptocurrencies,” allowing nation-states to play the “big game in this new space.”

Related: House bill may ban algorithmic stablecoins for two years

axial peine

However, Dwecky still described axial bank quantitatif currencies as the biggest threat to the financial strength of the United States.

“Whether China is alone or with it [Brazil, Russia and India]able to échafaudé their non-cryptocurrency virtual currencies with durable quantitatif currency,” he told the subcommittee, “a real financial and citoyen security problem that will soon emerge beyond your ability to regulate.”

For the United States, advances in axial bank quantitatif currencies are “particularly arrogant” parce que it is where China can “undermine the dominance of the dollar.” Carla Norloffa senior fellow at the Atlantic Council studies the role that economics plays in geopolitics.

At the same time, she added, this does not mean that the United States needs a quantitatif dollar at this conclusion, parce que China is not yet competitive.

“For the Chinese, it is critical that they have a axial bank quantitatif currency in order to get anywhere close to where the United States is today,” Norloff said.

élément of the issue

Far from being élément of the problem, cryptocurrencies can also be élément of the issue. Jonathan LevineCo-founder of blockchain data company Chainalysis, told the séminaire.

Saying that China has made “tremendous progress” in this field over the past 15 years and is now moving to export these domestic payment systems through investments in foreign fintech companies and upcoming CBDCs, Levin argued that “cryptocurrencies are in fact the number one changement that is what It is in line with American values ​​and constitutes a real competitive threat to China’s financial changement strategy and their attempt to own the financial rails of the 21st century.”

Although Bitcoin and its successors are considered anonymous, it is more accurate with a pseudonym, as each arrangement is statically recorded on a publicly accostable blockchain.

See also: The Ministry of Arrêté seeks to obscur the détention proverbe for money transfer maux

Saying that it is in many cases easier to investigate “the illicit use of cryptocurrency than with other traditional payment methods or some virtualité payment system,” Levine noted his company’s recent obole in a government fouille that seized $30 million worth of stolen cryptocurrency. From North Korean hackers.

He added: “The same qualities that make blockchain a soigné for good — unauthorized and decentralized value transfer across borders at the speed of the internet — also make it attractive to illicit actors who want to move funds quickly across borders.” Ari RedboardD., a configurer attorney general and head of legal and government affairs at TRM Labs, a blockchain bienveillance firm.

“But the truth is, we’ve never had more clarity on the financial flows,” he said. “In many cases, cases involving the illicit use of cryptocurrencies are actually easier to investigate than other traditional payment methods or some of the virtualité payment systems we are talking embout.”

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