Market Watch: America is losing out to China in the development of blockchain technology – By Omer Ozden

July 2, 2021

(Excerpt below - read the full article on Market Watch)

China embraces blockchain

By contrast, in October 2019, President Xi Jinping announced that the development of blockchain technology is a national priority. This top-down approach has resulted in China rolling out its own digital currency, its own national blockchain called the BSN, and dominance in various aspects of blockchain adoption (such as, up till now, bitcoin mining) and intellectual property development.

China is home to the most blockchain patent filings out of any market. Comparatively, America has had no national policy on blockchain, and leadership has been silent. In Biden’s 100th Day speech, he talked about the importance of innovation, yet failed to mention blockchain. The prior White House occupant’s most memorable utterance on the subject was a night-time toilet tweet: “I am not a fan of bitcoin and other Cryptocurrencies.”

The good news in America, and elsewhere in the world, is that eventually younger, better informed leaders will emerge, such as the new head of the SEC, Gary Gensler, who along with other officers of federal authorities and congressional representatives, have more informed viewpoints than their predecessors. Ultimately, time is on the side of blockchain.

As blockchain technology and related tokens become more impactful domestically, we can expect China’s regulators to have more restrictions on certain activities, primarily because they cross “red lines.” Expect more crackdowns and potentially regulations in the future related to curbing money laundering or capital flight.

Also potentially for situations where retail purchasers enter the market and expose financial markets to the systemic risk of overheated speculatory investment decisions. The high leverage that certain traders have taken may rise to this level of hitting the borders of the sandbox because they cross redlines of domestic policy.

Yet with China’s official top-down approach of support for the sector, and a generally supportive, yet unofficial “do no harm” approach, where the development and usage of blockchain technology continues so long as the red lines are carefully respected, China has emerged as one of the global leaders — and will likely remain leaps and bounds ahead of most other countries.

Omer Ozden is CEO of RockTree Capital, a merchant bank and fund focused on mobile internet and blockchain projects with offices in Beijing, Shanghai, New York and Toronto. The firm is founding investor in CasperLabs and serves as its China growth partner. He is also international partner of ZhenFund, an angel fund in China.