Western nations need better public-private cooperation on crypto, says Mohamed El-Erian

The famous economist has warned that western nations risk losing out to China in the emerging digital economy if they continue to be dismissive of crypto.

Mohamed El-Erian, chief economic advisor at Allianz, has called for greater cooperation between western governments and crypto businesses to better leverage the benefits of the ongoing cryptocurrency revolution.

In an article published in the Financial Times on Thursday, the famous economist highlighted China’s unified approach to dealing with crypto and blockchain as against the fragmented handling of the novel tech in the United States and Europe.

As part of the article, El-Erian called on western governments to adopt a less dismissive stance on crypto and be more open to embracing the innovations coming out of the cryptocurrency space  especially in the financial sector.

El-Erian characterized the debates among policymakers in the U.S. and Europe as being narrow-minded especially when put in the context of the greater issues at play concerning cryptocurrencies.

According to the Allianz executive, failure of the west to keep up with Beijing’s accelerated development of its digital economy could have significant implications beyond global finance and into the geopolitical sphere.

El-Erian suggested a more cooperative approach that balances the policy discomforts of governments and central bankers with the desire by the private sector to pursue digital finance innovations via cryptocurrencies.

Related: Law professor calls for crypto mining regulation during US Senate hearing

The Allianz executive enjoined all stakeholders — both public and private — to take the necessary steps needed to create the required synergistic interaction necessary for embracing the ongoing crypto revolution.

El-Erian also identified anti-money laundering compliance as being a necessary evil for crypto firms. According to the article, the onus is on crypto proponents to cultivate better relationships with regulatory stakeholders given the disruptive nature of the novel tech.

The famous economist is not alone in warning that the U.S. and Europe could fall behind China and Asia in the emerging digital economy. A combination of fragmented state and federal regulations have been identified as likely to force digital innovation out of America.

Meanwhile, crypto regulations appear to be more on the agenda with the likes of Senator Elizabeth Warren and Treasury Secretary Janet Yellen keen on introducing stricter laws guiding the market.

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