Ripple co-founder Chris Larsen discussed U.S. regulators’ ignorance towards regulating the blockchain and crypto space and how it is helping China.

In a recent interview with Wall Street Journal reporter Paul Vigna, Ripple’s co-founder and executive chairman Chris Larsen said that the United States has been “slow to the game” in terms of experimenting, implementing and regulating the blockchain and cryptocurrency industry.

Larsen said that the U.S. must change its viewpoint toward blockchain and cryptocurrency, as the industry is already past the 2017 and 2018 hype. The war against initial coin offering scams is won, he said, and now regulators must address the industry so that they can compete with China’s blockchain and cryptocurrency progress.

According to Larsen, U.S. regulators have so far only helped China get ahead by “officially giving clarity to the two protocols effectively controlled by Chinese miners: Bitcoin and Ethereum.”

If regulators fail to provide more clarity on blockchain, cryptocurrencies and the supporting technologies that will power the next-generation global financial system, the U.S. could face a potential catastrophe, Larsen warned.

Headed toward a tech cold war

China is quite visibly ahead of the U.S. when it comes to adopting and investing in blockchain and digital currency. As the two countries head into a technology cold war, China having control over the global financial system can prove devastating for the financial power held by the U.S. today, said Larsen. 

He further warned that in such a case, China may curb America’s power to make defense payments to its allies or block American banks and companies with a low “Chinese social credit score” and control the settlement time for their payments.

Even if there was a small chance that China could do that, the U.S. must keep a check on it and ensure that they are involved in this sphere to provide strong competition to the country, Larsen concluded.