China and US must learn from one another and collaborate on CBDC
China and the US have been competing in several areas for ages. This has now come into the cryptocurrency markets, and China is making good progress in this regard. Considering the developments, the US must collaborate with China and bring the best platform for everyone. As per the experts in both of these fields, these both nations are rapidly progressing, but if they come on a common platform and shake hands to develop these technologies, it can be too much beneficial for these platforms.
The US Senate Banking, along with the Housing and Urban Affairs Subcommittee, recently discussed the economic policy and considered the latest developments in the crypto industry. Many people believe that the time has come for a digital dollar as China is making good progress in the crypto world effects of which can be seen shortly.
Chinese government-backed CBDC project, which is working on Digital Currency Electronic Payment, is likely to replace SWIFT international financial messaging and payment system. Apart from that, China is also making good progress with regard to Blockchain technology.
While technically, both the US and China plan to work on similar technologies, the difference comes with economic interests and military interests along with political interests. Apart from that, the two countries also have a lot of disagreement with regard to human rights and privacy issues. These factors are not allowing them to work together on any project in a clear cut manner.
Corporate funding replacing government support
According to analysts, the digital currency sector in the US has attained this stage without any form of support from the government. Under normal circumstances, most innovation in the US happens with the support of government and private entities. However, in digital currency platforms, growth has happened due to support from corporate companies. The private entities are in no mood to collaborate with the government as this can bring in a lot of regulations at a later stage.
Facebook backed Libra also faced similar issues with the regulators and central banks when it came up with a proposal for a global stable coin. Facebook had to make a lot of changes after this, and it came with an updated version of Libra. In the latest development, the global ambitions were toned down, and the access to digital payments was restricted within the US. Apart from that, the concept of cryptocurrencies took a backseat, and blockchain technology came into the forefront.