“Innovation will flow where it can thrive the greatest, and aggressively trying to stop it will encourage it to go somewhere else,” Sheila Warren explained.
The digital yuan, according to Sheila Warren, CEO of the Crypto Council for Innovation and former head of data, blockchain, and digital assets at the World Economic Forum, may create some issues for the US. Regulators and policymakers may want to think about how to stimulate digital innovation, given China’s citizens are already “very tech savvy.”
Warren said in an interview at Austin’s SXSW festival that while she didn’t think China’s digital yuan would have a large influence on retail payments in the US, the adoption of the technology underlying it may have an impact on the dollar’s global dominance. The CCI CEO went on to say that by creating a central bank digital currency with wholesale use cases, the Federal Reserve could make a “bold move” in preserving the dollar’s function. Regardless of whether other nations adopt the digital currency, China’s deployment of the e-CNY might help create a standard for retail payments.
“With the growth of what’s happening in Asia, Africa, and around the world, we can no longer adhere to American exceptionalism,” Warren added. “Innovation will go to where it can thrive the greatest, and aggressively stifling it will encourage it to move somewhere else.”
“These things are going to get developed,” she added. The question is, where do we want them to be placed geographically, and under what legal, regulatory, and sociocultural systems, which will prioritise some types of applications and models over others?”
According to Warren, several portions of the United States, such as Miami, Austin, and parts of Colorado, are embracing innovation-friendly regulatory and business paradigms. According to the CEO of the CCI, President Joe Biden’s new executive order establishing a regulatory framework for cryptocurrency could be a “huge driver” of jobs and innovation.
“Every US city needs to embrace an innovation attitude,” Warren added. “That’s what’s going on in many regions of Asia, where every city is constantly examining everything.”
Warren spent her time at the World Economic Forum researching central bank digital currencies and advocating for the use of blockchain technology before leaving in February to become the CEO of the Crypto Council for Innovation. Coinbase, Gemini, Fidelity Digital Assets, Paradigm, Ribbit Capital, Andreessen Horowitz, and Block are among the companies in the alliance.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.