The United States blockchain industry is falling behind more progressive jurisdictions, particularly in Asia, according to crypto industry leaders.
Fiona Murray, the managing director of Ripple Asia Pacific, told Cointelegraph that a “lack of open-mindedness” in the US is driving business overseas.
And while much of the industry is unhappy with the current regulatory landscape, there are other important factors curbing US growth.
Industry insiders and executives have identified six key areas the US must swiftly address if it wishes to stay competitive in a highly competitive global market.
Talent development
Anthony Georgiades, founder of the Web3 layer-1 Pastel and general partner at VC firm Innovating Capital believes the US needs to do more to nurture talent.
Georgiades told Cointelegraph that despite growing interest from institutions and investors, “the US is struggling to attract and retain the talent needed to build requisite infrastructure” as “the number of blockchain devs in the US continues to decrease.”
“To combat this dynamic, we need to focus on targeted efforts, like funding specialized blockchain training programs in universities, fast-tracking visa programs for skilled foreign developers, or even supporting public-private partnerships to fuel developer initiatives.”
Finally, Georgiades would like to see the US bring forward talent-centered programs, including research grants and tax breaks for companies investing in and developing blockchain talent.
Banking
As Murray told Cointelegraph, the US also needs to “have a supportive banking community.”
Ogle, hack negotiator and founder of the Glue blockchain concurs.
According to Ogle, the best ways to improve the US crypto industry are “not very complicated” and include making it possible to “use a bank without getting banned or restricted if you say your company is a crypto business.”
Ogle, who is based in the US but founded Glue in Switzerland, says the company would “have loved nothing more” to establish itself in the US, “but it simply wasn’t possible” from a risk perspective.
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Following a recent trip throughout Asia, Ogle says, “There is a very meaningful difference between how seriously folks in Singapore, Korea or Japan are taking the industry versus, for example, the US.”
He says the US can still catch up if it hurries, but “It’s getting left way, way behind as of now, and anyone on the ground in Asia would agree.”
User experience
Erik LaPaglia, chief strategy officer at Propy, a blockchain-based real estate platform, says there is still some way to go before the wider public understands and accepts blockchain.
“A lot of people still see blockchain as this niche or overly technical thing, and that holds back adoption,” LaPaglia told Cointelegraph.
And while better public education would go some way to improve the matter, LaPaglia believes the industry needs to focus on better user experiences.
“Much of this onus lies with the builders and leadership teams – we all need to be laser-focused on simple UX and two-click digital interactions. This would solve much confusion around ‘how to use blockchain.’ After all, no one needs to be concerned with the back end of an iPhone because the interface is so simple.”
Central bank digital currency
Donald Trump says there will be no central bank digital currency (CBDC) in the US should he win reelection in 2024, but Georgiades believes the US is already lagging in this department, pointing to a lack of commitment from both Democrat and Republican parties.
“It is imperative that the US allocate more personnel and funding to explore the feasibility and implementation of a CBDC if we wish to keep up with the rest of the global economy,” Georgiades said.
“Establishing a dedicated task force, public research initiative or partnerships between the government and private sector via tax incentives or fiscal benefits can all accelerate this process and ensure the US does not fall behind in the global financial landscape.”
Public-private collaboration
Georgiades said the US government must also strengthen partnerships with the private sector “through initiatives like tax incentives for blockchain research and development, grants for pilot projects, and collaboration on standards development.”
He said this approach was necessary to “bridge the gap” between traditional investors and the blockchain sector.
Murray pointed to Singapore’s progress in real-world assets as one example of what can be achieved when the public and private sectors cooperate.
“Leveraging industry insights and regulatory expertise together results in a greater understanding of the critical issues and effective policy solutions. This is something that Singapore does well,” Murray told Cointelegraph.
Murray cited Project Guardian, a collaborative initiative between the Monetary Authority of Singapore and over twenty industry players to experiment with tokenizing real-world assets.
International leadership
Georgiades would like to see the US take a more proactive role in shaping the future of blockchain and industry standards.
“By working with global partners to establish interoperable systems and frameworks, the US can ensure that its companies are not left out of the rapidly evolving global blockchain ecosystem,” said Georgiades. “This leadership is essential for realizing the full potential of a global blockchain future.”
Markus Levin, co-founder of the decentralized physical infrastructure network XYO, believes the US needs to protect its position internationally.
“The US needs to protect and even enhance its position as a global leader in blockchain technology to foster innovation, economic growth, and national security,” Levin told Cointelegraph.
Regulation
For many working in the US blockchain industry, the single biggest issue they cite is regulation. The lack of a clear framework for US firms coupled with enforcement action by the Securities and Exchange Commission (SEC) is viewed as a major stumbling block.
For that reason, Tom Kiddle, co-founder at the Ripple-backed asset custodian Palisade, believes that the US should follow the EU’s example, pointing to the Markets in Crypto-Assets Regulation (MiCA).
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“If the US wants to attract and develop a competitive crypto sector, it must develop a clear regulatory framework similar to that of the EU’s MiCA,” Kiddle told Cointelegraph.
Chris Hart, CEO of tokenized identity platform Civic, lamented the lack of legislative progress in the US.
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“Various initiatives have attempted to win support along the way to build new governing regimes (Fit21), pass a bipartisan stablecoin bill (Waters-McHenry), and establish other stablecoin efforts (Lumis-Gillibrand), but no new legislation has taken effect, leaving the SEC as the de facto rule-making body in the US,” Hart told Cointelegraph.
Like Kiddle, Hart pointed to Europe’s MiCA as an example to be emulated, but other regions, including Asia, are also ahead of the US, says Murray.
“Singapore has established a clear taxonomy for digital assets, which allows for a broad activity-based licensing framework which balances innovation with consumer protection,” Murray said. “These ‘rules of the road’ can be applied consistently and transparently, which ultimately is what innovative companies need to thrive.”