Restrictive US Crypto Policies Empower China, Armstrong Says

Coinbase CEO Brian Armstrong warns that restrictive crypto policies in the United States could ultimately benefit “adversary nations” such as China.

In a May 30 op-ed for MarketWatch, Armstrong warned again that the U.S. could lose its status as a financial leader and innovation hub if it dismisses cryptocurrencies as an unstable asset class due to recent market volatility.

Armstrong urged policymakers to recognize that cryptocurrency is “about much more than individual transactions” and represents a “transformative technology” that can revolutionize numerous industries, citing its ability to provide creators with royalties for secondary market transactions as an example and adding:

“Crypto, like the internet before it, has the potential to modernize finance and numerous other sectors, from supply chains to social media, by offering a faster, cheaper, more private, and accessible platform.”

As a public figure and CEO of Coinbase, Armstrong has long advocated for U.S. policymakers to provide the cryptocurrency industry with regulatory clarification.

Coinbase has persisted in requesting clarification from the U.S. Securities and Exchange Commission regarding which digital assets qualify as securities and has opposed the agency’s “regulation by enforcement” approach.

Gary Gensler, chairman of the SEC, has argued in the past that digital assets already fall under existing securities regulations.

In the op-ed, Armstrong stated that it was unsurprising that Hong Kong is positioning itself as a global crypto hub, given China’s efforts to challenge the U.S.’s position as the global financial leader in a variety of ways, including the recent launch of the digital yuan and Belt and Road Initiatives.

He cautioned that failing to pass comprehensive crypto legislation would force the U.S. to play catch-up and spend billions to bring innovation back to the country. However, even with a “colossal and sustained effort,” it may be too late.