The blockchain and cryptocurrency ecosystem was taken by surprise when the Chinese President, Xi Jinping, publicly announced that blockchain technology was going to play an instrumental role in terms of developing the country’s economy going forward.
The situation in the United States was far from ideal as the battle with regulators and policymakers had heated up in 2019, following the announcement of Libra.
Powell believed that if China eventually comes out with a centralized digital asset, it will force the United States’ hand and stimulate a response. The United States has been uncharacteristically quiet about any developments with blockchain or digital assets and Powell believed that it was because the country was fearful of any radical change.
“The U.S is the world’s reserve currency. You know the dollar is the world reserve currency so there’s a lot to lose if you lose that position, you could see things like hyperinflation in the country. Right? So there’s a lot at stake.”
Moreover, Powell indicated that the United States did not want to move away from its current dominant position in the global financial landscape and it wanted to maintain its “winning position.”
Speaking about crypto markets in the U.S, Powell said that the market interest was still growing but it only amassed 20 percent of Kraken’s entire business. However, despite a smaller fraction of business, Powell said that over 80 percent of Kraken’s compliance and legal resources went into meeting regulatory concerns in the United States.