The trade war between the United States of America and China has entered a new phase underlying the growing struggle between the two powerhouses for superiority. As this feud deepens, the two countries have tried to show their might across different sectors.
Artificial intelligence and cryptocurrency are the new battlegrounds for the two nations heading different routes to leverage the innovations to support their goals. Meanwhile, the battle is already changing international politics and the global economy.
In the AI sector, the US first took the lead in 2022 with the release of ChatGPT by American artificial intelligence research firm, OpenAI. Its Chinese counterpart failed to give a good response as all attempts couldn’t gain market attention.
While the US has dominated the AI market since then, the narrative has changed with the release of DeepSeek, giving China a huge advantage. The recent release of DeepSeek V-3 further confirmed China as the new leader of the AI sector.
Today, DeepSeek AI assistant is flying high above ChatGPT on the Apple Store, underlining the dominance of China. Despite how the US flopped its lead in the artificial intelligence space, the country has emerged as the new capital of cryptocurrency.
Development of digital yuan and ban on crypto mining in China
China’s embracement of digital currency is to further support its goal of dislodging the US dollar as the most recognized currency in international trade. Instead of allowing the crypto market to flourish, China banned cryptocurrencies within its jurisdiction in 2022 to facilitate the establishment of its Central Bank Digital Currency (CBDC).
The ban also extended to cryptocurrency mining leading to the exodus of miners from China to the US. Most of the existing crypto miners in 2019 were based in China, but the clampdown by the Chinese government forced them out, much to the benefit of the US.
Then, China narrated how the rising use of cryptocurrencies for criminal activities motivated the ban. In response, China launched the digital yuan through a retail pilot program in 29 selected regions in the country.
Introducing the digital yuan, e-CNY is designed to reduce the use of cash and embrace a digital payment system. As a CBDC, the token is pegged to the local Chinese Yuan maintaining a 1:1 ratio with the fiat.
Despite the ban, the local use of cryptocurrency is still common in China as citizens refer to it alongside other established payment systems like WeChat Pay or AliPay.
How Trump set the US on a new path
The US followed a similar pathway with China until late 2024 due to the emergence of Donald Trump as the president of the United States. The US during the first administration of Trump and his successor Biden maintained a hostile posture to the digital assets sector.
At one point, the United States explored the option of a CBDC to improve access to the US dollar to further consolidate its reputation as a global currency. Furthermore, the chaos resulted in various suits against numerous cryptocurrency firms, with some eventually quitting the US market.
With a repentant move, the new US president declared himself as a crypto president while vowing to make the US the capital of cryptocurrency innovations. These declarations were backed by promising moves like the declaration of the US strategic Bitcoin reserve.
Also, Trump recently held a cryptocurrency summit at the White House where top industry leaders graced the event. The strategic moves reflect the declaration of Trump which emphasized the need for the US to take over the cryptocurrency market before China.
The presence of Trump in the White House has turned the US into the hottest cryptocurrency hub in the world as top companies like Binance are reentering the American market. With the backing of the White House, investors are confident once more to invest in the US crypto market.
Parting Words
Without a doubt, China has established a long lead in the AI space ahead of the US. Nevertheless, while both countries never took a bold step to claim the crypto space, Donald Trump has repositioned the US as the next crypto hub.
To an extent, the US now commands a significant impact on the cryptocurrency industry, becoming a major market player. By far, the United States is now the best crypto hub ahead of China.
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