Does China have too much sway over digital currency?
That, apparently, is a concern of the outgoing Trump Administration’s spy chief, with Director of National Intelligence John Ratcliffe warning, in a letter obtained by the Washington Examiner, of Beijing’s growing influence and power in the cryptocurrency sector.
In the letter, addressed to Securities and Exchange Commission (SEC) Chairman Jay Clayton, Ratcliffe said China is now home to over half of the world’s cryptocurrency mining operations and that Beijing is weighing plans for an official digital currency that could box out U.S.-based innovators and entrepreneurs, according to the newspaper.
And Ratcliffe has found an influential congressional ally, having attached a copy of a letter by Sen. Tom Cotton (R-Ark.) that expresses similar concerns.
Cotton has previously pushed the SEC to step up its involvement in overseeing the cryptocurrency sector with an eye toward creating a more level, or more favorable, playing field for U.S. competitors.
The SEC needs to “develop a clearer articulation of policy and, ultimately, formal Commission guidance addressing digital currencies” Cotton noted in a 2018 letter, the Washington Examiner said.
Cotton escalated his warning in another, follow-up letter in July, to national security adviser Robert O’Brien, with a particularly barbed warning about “Chinese-controlled Bitcoin and Ether.”
“So far the Commission has concluded that only two digital assets should be considered non-securities — Chinese-controlled Bitcoin and Ether,” Cotton wrote, according to the Washington Examiner.
“The continued lack of regulatory clarity not only hurts U.S.-developed digital assets, it puts American national and economic security gravely at risk,” Cotton wrote.
The letter by the U.S. spy chief — and Cotton’s missives — come on the heels of an executive order President Trump issued earlier this month barring transactions between individuals and companies in the U.S. with a host of companies tied to the China’s People’s Liberation Army.
There is a possibility the Trump Administration might try to extend or interpret the order as covering “Chinese-linked digital currency companies,” the Washington Examiner reports.