China Seizes the Blockchain Opportunity. How Should the US Respond?

Although Xi Jinping's passing statement about China needing to "Seize the opportunity" posed by blockchain technology was thin on details, it's unwise to assume nothing will come of it.

As CoinDesk's David Pan will report on Monday, there's already a massive amount of blockchain development going on in China.

The news out of China affirms Facebook CEO Mark Zuckerberg's warning to Congress during last week's contentious testimony over his company's plans for the Libra cryptocurrency that the U.S. is at risk of falling behind the innovation curve.

China is powering ahead, while the U.S. is bickering over a project that will be stalled in prototype testing phase for a long time and is throwing regulatory roadblocks in the way of countless other cryptocurrency ideas.

To be sure, many in the crypto community are dismissive of China's blockchain strategy.

We must consider these moves in the context of other advances China is making in related fields.

All these could give China a competitive economic advantage.

Ideally, it would embrace the kind of approach to technological development that China simply can't afford to take: the open, permissionless, decentralized one preferred by the crypto critics of closed, permissioned, centralized blockchain solutions.

The Trump Administration's protectionist approach to trade - marked by its brutal tariff war with China - and the President's proclivity to reward or punish favorite industries and treat every negotiation as a winner-take-all "Art of the Deal" reflects the inward, closed mindset of zero-sum game thinking.

Ergo, an America that embraces permissionless innovation and open blockchain models has a chance to outcompete China.