Wealthy investor Mike Novogratz says the United States has its luck in its hands, but that it will have a major competitive disadvantage if it doesn’t reach a digital dollar soon.
This move would be particularly important as China launched the first salvation at the forefront of digital currency, he explained.
“For me it’s an existential crisis, we need a digital dollar,” said Novogratz, executive director of digital merchant bank Galaxy Digital GLXY,
he told MarketWatch in an interview Friday, ahead of the second part of a series of MarketWatch and Barron’s “Investing in Crypto” virtual events that will continue Wednesday.
The digital yuan has long been seen as not only the evolution of money for China, but also as a way to compete with the United States and other major developed economies. The virtual yuan China is making is now controlled by its central bank, which will issue the new electronic money, the Wall Street Journal reported.
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China’s apparent embrace of a digitized yuan has supported the broader complex of digital assets, exemplified by bitcoin BTCUSD,
a decentralized cryptographic asset that has long been seen as a potential store of value if not a payment system for enthusiasts. In the last check, Bitcoin changed hands at $ 58,477 on CoinDesk.
Novogratz says the United States can now control its future, but noted that Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell will have to “land this supertanker,” in reference to the trillions of dollars of monetary and fiscal spending made to avoid the worst of the economic aftershocks of the COVID pandemic.
Read: China’s bitcoin crackdown contradicts Peter Thiel’s belief that it is a “financial weapon” against the US
“If our fiscal and monetary policy begins to look like that of a Banana Republic … you will find some time in Minsky when confidence is broken,” Novogratz warned. Chicago-born Hyman Minsky, who died on October 24, 1996, argued that a period of distortions in the financial system ended very badly.
Stock market investors have been worried about rising US inflation, which has already created some hesitation in trading on the Dow Jones Industrial Average DJIA,
and the S&P 500 SPX index,
in recent weeks. But record highs in stock index markets on Friday imply that investors may be accepting the Fed’s expectations of a slow approach to policy normalization and a transient burst of inflation following the coronavirus crisis.
President Joe Biden was scheduled to meet Monday with members of the bipartisan Congress to try to support his $ 2.4 trillion infrastructure plan, White House Press Secretary Jen Psaki said on Friday. CNBC.
Meanwhile, Novogratz said there is “no evidence that the Chinese government bought bitcoins,” let alone arming it, referring to comments made recently by angel investor and billionaire Peter Thiel.
Sometimes, “he likes to say provocative things,” Novogratz said.
Thiel made waves on Tuesday when he suggested that bitcoin could be considered “partly a Chinese financial weapon against the United States,” because, he argued, bitcoin undermines the status of the U.S. dollar as a world reserve currency.