China Tech Threat co-founder Roslyn Layton issued a policy letter today to the U.S. Senate, urging a sharp focus be placed on the needs of the U.S. cryptocurrency and blockchain industry when handling the confirmation of the next Chair of the Securities and Exchange Commission (SEC).
Layton warned of a “deliberate lack of regulatory clarity” under outgoing SEC Chairman Jay Clayton, which has benefited China and other U.S. rivals while disadvantaging American companies. “This has to change in the next administration,” she urged.
“A Biden administration has promised technocratic competence, bipartisan cooperation, and ‘building back’ American economic power that can compete with and win against China,” Layton wrote in the policy letter. “The U.S. cryptocurrency and blockchain industry wants to be included in that vision.”
Layton explains that “the lack of a coherent regulatory framework for digital assets” has created “a maze of financial and regulatory institutions with competing agendas” fighting to assert themselves over the U.S. industry, with the SEC holding the most influence. This is due to rules dating back to the 1930s which “never imagined blockchain solutions or a new global financial infrastructure,” she wrote.
Meanwhile, Layton adds, “China has laid the groundwork to capture the fruits of U.S. innovation and use its own digital currency to unseat the dollar.” She notes that Chinese crypto miners have already gained control of Bitcoin and Ether, and the country’s central bank is now “distributing its own digital yuan to be used at thousands of retailers – with nearly a fifth of residents in Shenzhen city testing the technology today.”
“It is only a matter of time before China’s digital currency is offered to billions across the globe coupled with Chinese payment solutions copied from U.S. innovators,” Layton warns, adding that “the U.S. won’t be able to block the proliferation of digital yuan. It can only win by making a better solution and getting to market first. For the last four years, the regulatory mess here at home has made that increasingly difficult to imagine.”
Layton praised the Congress for its recent bipartisan passage of the Holding Foreign Companies Accountable Act (S.945), which may delist publicly held companies in the U.S. that are controlled by Chinese state or Communist Party entities and refuse to follow enhanced SEC transparency rules on ownership.
She said both parties mostly agree on the concerns she raises, can unite on raising them with the nominee for the next SEC Chair and ensure a far more thoughtful and engaged approach to the needs of this emerging industry.
“It is vital to ensure that the new SEC leadership is committed to working closely with you and other agencies to end the regulatory chaos, preserve U.S. leadership, stop benefiting the PRC, and win the race to market,” Layton concluded.
To read the full Senate Policy Letter, click here.