Coinbase founder and CEO Brian Armstrong attends Consensus 2019 at the Hilton Midtown Hotel on May 15, 2019 in Recent York City.
Steven Ferdman | Getty Images
The standard financial system has served us well for hundreds of years, but it surely is starting to point out its age. Like all systems before it, the day has come when technological advances provide the opportunity to make it faster, more efficient and easier. From cable TV to streaming, from cell phones to smartphones to email, technological advances have modernized nearly every industry we face in an increasingly connected online world. Apart from one.
While you might find a way to make use of online banking, the way the traditional financial system works behind the scenes has largely remained unchanged for at the least 40 years. And Americans are beginning to feel it. Nearly seven in ten Americans consider the financial system needs major changes or an entire overhaul, in accordance with the latest Morning consultation. That is where crypto is available in and the technology that underpins it, the blockchain. Cryptocurrencies are a faster, more private, efficient, cheaper and user-controlled financial system. It is not a alternative for the traditional financial system, it’s an update. An update that would increase global economic freedom and empower thousands and thousands of previously unbanked people around the world.
While the consumer advantages that cryptocurrencies can bring to the financial system are innumerable, additionally it is necessary to acknowledge the geopolitical advantages. The US has long been a pacesetter in global economic and political affairs, but its dominance is being challenged by other world superpowers. For instance, China has made significant strides in digital currencies and has already introduced its own digital yuan. As well as, the UK, Japan and the EU have made significant progress, with the EU recently introducing MiCA which goals to fill the gaps in existing EU financial services rules by establishing a harmonized set of rules for crypto-assets and related activities and services.
By adopting cryptocurrencies and other forms of digital finance, the United States cannot only update its financial system but in addition solidify its status as a geopolitical powerhouse. The dollar has enjoyed many years of being the world’s reserve currency, but has never been under more pressure. Imagine a world where the US issues its own USD stablecoin on a blockchain. Not only would this provide access to the dollar to thousands and thousands of individuals who previously didn’t have a checking account, but it surely would even be the de facto digital currency for remittances and international currency transfers, ensuring that the dollar would remain the global reserve currency each in the in addition to beyond. We saw this recently in Ukraine, which was utilized by the United Nations Refugee Agency (UNHCR). USDC to supply assistance to those affected by regional conflict.
America is at a once-in-a-generation turning point: we now have the opportunity to be a pacesetter in the digital currency space and reap the advantages that leadership provides, or we are able to hand over our leadership role to geopolitical adversaries who’re desirous to take up the mantle as a world weightlifter hard in the twenty first century. As other countries implement cryptocurrency regulations and guidelines, the US risks falling behind each technologically and politically.
I selected to construct Coinbase in the US because I feel America ought to be at the forefront as the web architecture evolves into the next generation of the financial system. Coinbase has been advocating a transparent regulatory framework for cryptocurrencies for over a decade. But while we see progress in other jurisdictions, the US seems more focused on power battles between regulators. No other country in the world has spent a lot time and energy attempting to persuade its residents that crypto assets are securities. There isn’t any forest for trees in the US.
To see the impact of sending innovation overseas, just return to mid-2020. The US semiconductor industry was an innovation leader, with corporations like Intel and IBM at the forefront of developing recent technologies. Nevertheless, in the Eighties and Nineteen Nineties, a mix of aspects led to a shift in the industry, with semiconductor manufacturing increasingly moving overseas. Today we’re suffering the consequences – chip shortages have affected our entire economy – from the automotive industry to healthcare to the supply chain. It is rather necessary that we learn from these lessons and keep innovation ashore.
The U.S. government must take a more proactive approach to cryptocurrencies and supply a transparent regulatory framework for the industry with a forward-looking policy that takes into consideration the many unique and modern facets of blockchain technology. It will create a more stable and secure environment for cryptocurrency development and help attract more investment and talent to the US.
Corporations like Coin base excel in fostering innovation and making a secure environment for cryptocurrency development, but we cannot do it alone. It’s time for the US to take motion and work with its US crypto corporations, not against them, to construct a comprehensive regulatory framework that protects users, empowers innovators, and provides Americans with a financial system built for the twenty first century.
Brian Armstrong is the CEO and co-founder of Coinbase.