Opinion

Why the US should not try to thwart China’s blockchain and digital currency ambitions

China is racing ahead with blockchain tech and its own digital currency and, given the vast implications of this, needs to quickly establish international benchmarks and a clearer legislative framework

The US can hinder this or work together with China to establish global governance, manage the disruptions and harness the tech for global growth

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Edward Tse is founder and CEO of Gao Feng Advisory Company, a strategy consultancy with roots in China assisting clients on global business and management issues.

Published: 11:00am, 18 Nov 2019Updated: 11:06am, 18 Nov 2019

In the October 23 Congress hearing on Facebook’s digital currency Libra, Mark Zuckerberg, the founder and CEO of the social media giant, warned Washington that blocking Libra would give way to China’s growing technological supremacy, which would eventually jeopardise America’s democratic values.

Zuckerberg’s remarks, though somewhat apocalyptic, fit into the rhetorical framework of the battle for technological leadership between the world’s two largest economies, the United States and China. Identified by the Trump administration as a revisionist power and strategic threat, China has been at the forefront of tech-enabled innovations, such as digital currency, since 2014.

During a meeting last month, President Xi Jinping endorsed blockchain as the nation’s core technology. China’s plan to launch a sovereign digital currency is also triggering new appetites for start-ups, traders, investors and researchers.

As the underlying technology of digital currencies such as bitcoin and Libra, blockchain is a distributed, decentralised and public digital ledger system which allows information and data to be immutably stored and transparent to all. The technology promises unparalleled efficiency, security and transparency and carries profound implications in a variety of scenarios from finance to manufacturing and energy.