Brooks claims that the Asian nation keeps more than 50% of the Bitcoin hashrate under its control.
The Comptroller advises US authorities to promote the use of stablecoins.
Brian Brooks, who now holds the position of Comptroller of the Currency in the United States, recently claimed that the Bitcoin network is controlled by China. The former head of Coinbase and now a public official, points out that the Asian nation is leading the way in the new market of the “Internet for the transfer of value”.
Brooks made these statements within the framework of the 2020 National Lawyers Convention, an event that was held in digital format. Accompanied by other speakers, Brooks spoke about blockchain networks, the cryptocurrency market and an eventual launch of the digital dollar; project that is being discussed by the Federal Reserve and US authorities.
Brian Brooks, Comptroller of the US currency, claims that the Bitcoin network is controlled by China. Source: wikipedia.org
Previously Brian Brooks has expressed his dissatisfaction with the development of a digital dollar issued by the central bank of the United States, considering that this idea is contrary to the principles of decentralization and free market. In this new event Brooks made it clear that he has not changed his mind, noting that if the United States wants to be a competitive country in the cryptocurrency market, it may not be so interested in following in China’s footsteps in this matter.
To illustrate his point, the Comptroller of the Currency clarified that decentralized networks, including blockchains, are a new type of Internet that is based “on the transfer of value.” Unlike the internet we commonly know, where the transmission of information is the focal point, blockchain networks seek to issue and transfer money with the premise that they are “more inclusive, more efficient, resilient and faster,” adds Brooks.
The public official affirms that this has opened the possibility of a new market, where the great powers are putting their efforts to capitalize a good portion. However, Brooks believes that China is far ahead compared to other countries in the world, such as Europe or the United States itself, which are still in the exploratory phase on how they will approach this new technology.
The Asian giant has not only risked developing its own digital yuan, issued and administered by the Central Bank, but also most of the Bitcoin miners are concentrated in their territory. Because of this, Brooks points out that “more than 51% of the Bitcoin mining hashrate is in China”, which would mean that this country handles the cryptocurrency to a greater extent than other nations on the globe.
This reality has worried more than one bitcoiner and has come to question the decentralization of the network. Despite the fact that by 2020 China has more than 50% of the accumulated Bitcoin hashrate in its territoryAnalysts like Jameson Lopp consider that it is very difficult for the Chinese government to have full control of the network, because it would go against the monetary interests of the very miners who make life in the nation.
The US has two options to make with cryptocurrencies
Regardless of the limited or forceful implications that China may have on Bitcoin, Brooks believes that the United States must make a decision on what its national policy will be with regard to cryptocurrencies. The Comptroller of the Currency states that There are two options: follow in the footsteps of China or bet on private companies.
The Federal Reserve has been discussing in recent months the possibility of them issuing a digital dollar, just as China has done with its yuan. This position would also follow in the footsteps of Europe, where the European Union has already given a date of between 2 and 4 years for the official launch of its digital euro. However, Brooks believes that the time the United States will take is going to be even longer, because they are hardly in talks.
China is already testing its digital yuan on its population, while the United States is still debating whether or not they need a digital dollar. Composition CriptoNoticias.
“We are four years behind China,” he said at the convention. In this sense, Brian Brooks points out that The United States could lag behind compared to the Asian giant. A country that is betting on creating a cryptocurrency that is more global and “easy to use than the dollar”, since it could be transferred in a few minutes, the controller says.
Faced with this difficult situation, Brooks continues to propose that the state support and monitor the use of stablecoins. Stable cryptocurrencies, issued by private companies, seem to him a viable solution for the United States to become a strong competitor on the “Internet for the transfer of value.”
The official believes that this approach is similar to what the United States had when the Internet became popular. Instead of centralizing control of this network, it promoted the development of businesses, services, and new ideas around this technology, which were built by private companies. This in turn helped the economy grow, as the nation brought together several of the most iconic companies in the Internet world, such as Google, Facebook or Twitter (just to name a few).
“Just as we have multiple text messaging apps on our phone to transfer information, we can have multiple stablecoins,” he proposed at the event. Brooks’s idea is that you are private companies in charge of issuing digital dollars must meet strict parameters to function, as well as must be supervised by the Central Bank and the financial authorities.
If the State were to promote the use of these currencies and companies, Brooks affirms that a more decentralized market would be maintained, compared to if a digital currency were created centrally issued by the Federal Reserve. “Blockchains are the future,” Brooks ruled at the end of his speech, recalling that it is necessary for the United States to determine how the cryptocurrency market will develop at the national level.