China is the undisputed global leader in Cryptocurrency mining especially Bitcoin. This gives the country a significant influence on companies in other countries such as the U.S. given that Bitcoin is the most popular altcoin. President Donald Trump’s government is now concerned and seems to rush to introduce some changes to alter the game.
Bitcoin Mining In China
When it comes to Bitcoin mining, no other country rivals China, which controls more than 70 percent of the coin’s hashing-power. Some of the Crypto mining hardware manufacturers such as Canaan, Ebang, and Bitmain are based in the country are among the largest ones in the world. These companies control the global Cryptocurrency mining hardware market and are the leading exporters in most markets, the United States included.
President Trump’s administration has not been comfortable with this dominance according to Cory Johnson, Ripple’s Chief Strategists. The American government feels that Bitcoin gives China more powers to influence the country’s companies. The government has already expressed the need to address China’s dominance in Bitcoin mining.
Can America Use Ripple To Counter China?
Johnson recently admitted that the government has been trying to look at XRP’s competitive strength to see whether it could be used to rival Bitcoin. The company has been in close contact with regulators, politicians, and Trump administration. Johnson told Breaker magazine that the talks have been around helping the government and its machinery to have an understanding of how ripple works and its role in the Crypto market.
Unlike Bitcoin, XRP is not mined. However, with 60 percent of the coin’s supply being in the hands of Ripple (the company), the coins are regarded as less decentralized. When it comes to market capitalization, XRP is nowhere near Bitcoin with a capitalization of around $110 billion. Ethereum is second with over $20 billion with Ripple having a market capitalization of just $18 million.
Ripple has mainly been concerned with integrating its technology in the existing financial system to enhance its speed and reliability. The company has so far attracted over 100 institutions such as SBI, Banco Santander, and American Express among others. A top U.S. bank, PNC recently announced that it will be using RippleNet platform while providing cross-border payment services.
Government To Protect US Firms
President Trump has been leading a war to protect US companies against foreign firms. China has become a major victim of the government’s new economic protectionist program. America is working towards balancing out its trade deficit, with the president condemning his predecessors for giving China and other countries too much space without pushing for the same for local companies moving abroad.
The government has been concerned that American companies operating in China have been subjected to unfair guidelines. U.S. companies in the East Asia country have to get into joint ventures. According to the government, China takes this opportunity to force these companies to transfer their technology.
A few months ago, the government introduced some changes that saw Crypto mining hardware that was previously categorized as “data processing” machines reclassified as “electrical machinery apparatus.” The changes saw the mining hardware get subjected to a 27.6 percent tax from zero. The government is determined to promote local companies to counter China’s dominance in the Bitcoin market even if it means supporting other Cryptocurrencies projects in the country.