The US has fallen significantly behind China in the race to develop a blockchain-based payment system, Pantera Capital founder and CEO Dan Morehead told Yahoo Finance in a recent interview.
“China is six years ahead of the United States in building a blockchain-based payment system,” Morehead said in a Friday segment on blockchain technology with Yahoo Finance Live.
China’s dominance in the blockchain space could spur America into action in the near future, according to Morehead, whose company is a hedge fund specializing in cryptocurrencies.
Former CFTC Chairman Chris Giancarlo wrote: a great opinion in the Journal in 2019, it called America’s ‘Sputnik’ moment, when China announced their blockchain,” Morehead said. “And there’s going to be a competition between countries to have the payment rail of the future.”
China accounted for 46% of the world’s total bitcoin mining power as of April 2021, according to research from the Cambridge Center for Alternative Finance (CCAF) released on July 15. However, this information came out for a bitcoin crackdown in China last month, prompting some miners to move to other countries.
Before the recent crackdown on bitcoin, China had already emphasized integrating blockchain technology into its financial system in several ways. Back in 2020, China announced the first blockchain networks are built and maintained by a central government. The network ran through 100 cities and was supported by both public and private companies.
China also had its own crypto brand been in the making for years, with this year’s testimony the launch of the digital Yuan, China’s own digital currency. The currency will now work side by side with notes and coins, although it remains unclear whether it will completely replace physical money.
While China was one of the first countries to jump on the proverbial blockchain train, other countries have also made significant strides. El Salvador caused a furore in crypto news after announcing earlier this summer that bitcoin would be accepted as legal tender, becoming the first country to do so. In Nigeria, crypto trading volumes have been extremely high: A 2020 online survey from Statista found that 32% of Nigerian respondents said they owned or used cryptocurrencies, the highest among all countries surveyed.
In addition, Kazakhstan recently saw a sixfold spike in its bitcoin mining share between September 2019 and April 2021. according to the CCAF’s July 15 investigation. Over the same period, the US saw its share rise from 4.1% to 16.8%.
In the US, companies like IBM (IBM) have used blockchain technology to support supply chains and build a digital intellectual property marketplace through non-fungible tokens (NFTs).
“I think in two or three years everyone will realize that blockchain is an asset class in its own right and they will have a blockchain team and a blockchain mapping,” Morehead said.
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.
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