The rise of blockchain and cryptocurrency technology has prompted an arms race between nations, with each seeking to gain an edge over the other in the development and implementation of these technologies. However, according to the US crypto lobby group, this race may be won by “adversarial nations,” posing significant risks for the US and its allies.
The blockchain arms race involves a global push to develop blockchain technology for various applications, such as financial transactions, supply chain management, and healthcare. Its rapid growth and potential to disrupt traditional industries have not gone unnoticed, with many nations racing to build their own blockchain infrastructure and attracting investments in the industry.
However, this arms race has become much more than just a competition between nations to be at the forefront of technological advancements. It has now become a matter of national security, with many countries turning towards blockchain technology as a means of securing sensitive data and critical infrastructure. This has led to a new era of strategic competition, where nations are competing to become the leader in this emerging technology.
The US crypto lobby group has warned that this race may be won by “adversarial nations,” which could pose significant risks for the US and its allies. These nations, which may not share US values and interests, could use blockchain technology to undermine US interests and advance their own agendas.
The group has identified two major risks associated with the blockchain arms race. The first is the potential for these adversarial nations to gain an advantage in the development and implementation of blockchain technology, giving them a strategic edge over the US. This could allow them to use blockchain technology for their own purposes, such as espionage and cyberattacks.
The second major risk is the potential for these adversarial nations to use blockchain technology to undermine US interests. For example, they could use the technology to disrupt financial systems, or to create alternative economies or payment systems that could be used to evade sanctions. They could also use the technology to prevent the US from accessing or sharing certain types of information.
These risks are not unknown to the US government, which has already taken some steps to address them. For example, the US Department of Defense has invested in blockchain technology as a means of improving supply chain security, while the US Treasury has imposed sanctions on certain actors in the cryptocurrency industry.
However, the US crypto lobby group argues that more needs to be done to address these risks. They have called for greater investment in blockchain technology by the US government, as well as increased collaboration between government agencies, the private sector, and academia. They also suggest that the US should work to create clear rules and regulations for the blockchain industry, in order to prevent bad actors from exploiting the technology.
Furthermore, the US crypto lobby group argues that the US must not only focus on its own development of blockchain technology, but also on collaborating with its allies. By working together, the US and its allies can share resources and expertise, and jointly develop blockchain technologies that are resistant to exploitation by malicious actors.
In conclusion, the blockchain arms race poses significant risks for the US and its allies, and the possibility of adversarial nations gaining an edge in the development and implementation of blockchain technology is a real concern. However, by taking proactive measures, such as increased investment, collaboration, and regulation, the US can protect itself from these risks and maintain its leadership in this emerging technology.
A blockchain lobbying group that includes big names such as Goldman Sachs, Citi Group, Circle, and Fidelity, has urged the US Congress to pass a legal framework for digital assets before other nations take advantage of the market gap. The US Chamber of Digital Commerce sent a formal call to action to Congress and the Senate regarding the need to prioritise crypto regulation. It emphasised the urgent need for Congress to organise a “Digital Asset and Blockchain Technology Solarium Commission” to spearhead the creation of a national strategic approach towards digital assets in the country. Failure to act would allow adversarial nations to take the lead in the space, which ultimately endangers US influence in the market as a whole.
China is a prime example of an adversarial action with the study of an internationally focused Blockchain-based Services Network (BSN) to “incorporate global development and trade and fill the US-created vacuum.” The global market is rife with countries that are considering or choosing to trade with China directly using their currency, the yuan, and bypassing the US dollar. Russia, Brazil, France, and Saudi Arabia are some of the countries that have shown interest in trading in Yuan directly with China.
The Chamber of Digital Commerce also cited the potential for the introduction of BRICS’ digital currency as well as developments in gold-backed digital currencies by Russia and Iran. The regulatory and legal opacity governing digital assets is limiting the US’s ability to choose wisely and invest in innovation that is potentially beneficial for the advancement of the industry within its shores.
A proposed commission by the name Solarium mentions Project Solarium, which was created to counter the threat of Soviet expansion, with the commission being created in 2019 to develop a strategic approach to defending against online attacks. The crypto advocacy group wants a similar strategy on digital assets and blockchain technology, which “desperately needs consensus in the wake of other nations’ advances.” As an American advocacy group founded in 2014, the Chamber of Digital Commerce promotes the emerging sector of blockchain technologies.
On May 19, the group supported Senator Tom Emmer in introducing the Securities Clarity Act seeking regulation clarity on crypto assets and blockchain technologies in the US. However, the Securities and Exchange Commission remains adamant on the existing archaic rules formed decades ago still apply to this new form of digital finance and its underlying blockchain technology.
The Chamber of Digital Commerce emphasises the importance of building regulations unique to digital assets and not applying existing archaic laws.
In conclusion, the US faces a potentially detrimental ripple effect if action is not taken to put measures in place to regulate digital assets and blockchain technology. However, the creation of a commission like the Digital Asset and Blockchain Technology Solarium Commission will help ensure that measures are put in place, and the US doesn’t lose out to adversarial nations in the global market.