The rivalry between the United States of America (USA) and China has a long history. During the previous couple of years, they have been competing in practically every industry including blockchain and cryptocurrency.
While China is making every effort to outperform other countries in releasing central bank digital currency (CBDC), its crypto-asset market has been lagging way behind the USA.
According To the report by Chainalysis, the US gained more than any other country in the world as far as Bitcoin transactions are concerned. All the combined gains recorded by the top 6 countries (China, Japan with $0.9B, the UK with $0.8B, Russia with $0.6B, Germany with $0.6B and France with $0.6B) are still below that of the US (had about $4.1 billion). That simply shows how powerful the US is in this nascent industry.
The US’ apparent dominance in cryptocurrency and blockchain technology enabled its investors to collectively generate more than $4 bln in realized BTC gains in last year, which is more than 3 times that of the second-highest nation China that registered about $1.1 bln.
In the past few years, China has been dominating this game and investors in this Asian country used to collectively make to the highest raw crypto asset transaction volume, but towards the end of last year (2020), the focused crypto-exchanges in the USA registered significant inflows and this accounts for its unprecedented gains.
One of the reasons why China’s cryptocurrency market lags is because digital currency trading has been unlawful in the country since the year 2019 to combat illegal activities associated with the asset such as money-laundering, terrorism funding, drug trafficking and many others.
Also, when Beijing barred all banks and payment companies from offering services related to crypto-asset transactions in May 2020, the price of BTC dropped from above $64k to below $34k. This indicates that whenever there is a decrease in demand, the price of a digital currency tends to fall since a few transactions will be made. Despite the ban, some Chinese people are still able to trade (buy, sell) cryptocurrencies online using VPNs and darknets platforms.
The increasing attack on cryptocurrency mining and trading that is currently happening in China is making it lose it on the world scene. The recent action by Inner Mongolia of hunting down BTC mining operations weakened the cryptocurrency industry in China further, as CoinIdol, a world blockchain news outlet, reported. That is why the US is continuing to punch above its weight in this field looking as if it has no competitor.
On the other side, the US is doing everything possible to see cryptocurrency businesses flourish in the country. The US government has gone as far as legalizing crypto exchanges - more positive actions are being done to regulate the crypto industry. The exchanges fall under the regulatory scope of the BSA (Bank Secrecy Act) - a registered business is an asset since it helps the owner to achieve his dreams of continuity hence leaping more from the industry.