Wealthy investor Mike Novogratz says the US is in control, but will face a major competitive disadvantage if it doesn’t come up with a digital dollar soon.
Such a move would be especially important as China has fired its first salvo on the digital currency front, he explained.
“For me it’s an existential crisis, we need a digital dollar,” said Novogratz, CEO of digital investment bank Galaxy Digital GLXY,
said MarketWatch in an interview on Friday, ahead of the second part of a MarketWatch and Barron’s “Investing in Crypto” virtual event series that continues Wednesday.
The digital yuan has long been viewed as not only the money evolution for China, but also a way to compete with the US and other major developed economies. The virtual yuan now being minted by China is controlled by the 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 provided some support for the broader digital asset complex exemplified by bitcoin BTCUSD,
a decentralized cryptographic asset long viewed by enthusiasts as a potential store of value, if not a payment system. At the last check, bitcoin changed hands for $ 58,477 on CoinDesk.
Novogratz says the US can currently control its future, but noted that Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell will have to “land this supertanker,” referring to the trillions of dollars in monetary and fiscal spending. done to help prevent the worst. of the economic aftershocks of the COVID pandemic.
ReadChina’s crackdown on bitcoin contradicts Peter Thiel’s belief that it is a ‘financial weapon’ against the US
“If our fiscal and monetary policy starts to look like a banana republic … then you will encounter a Minsky moment when confidence is waning,” Novogratz warned. Chicago-born Hyman Minsky, who died on October 24, 1996, believed that a period of disruptions in the financial system ended very badly.
Stock market investors have been concerned about a surge in US inflation, which has already caused some swings in trading the Dow Jones Industrial Average DJIA,
and the S&P 500 index SPX,
the past weeks. But record highs for the stock index markets on Friday imply that investors may accept Fed expectations for a slow approach in normalizing policy and a temporary burst of inflation in the wake of the coronavirus crisis.
President Joe Biden is said to meet with two parties of Congress on Monday in an effort to gain support for his $ 2.4 trillion infrastructure plan, White House press secretary Jen Psaki said Friday, CNBC reported.
Meanwhile, Novogratz said there is “no evidence whatsoever that the Chinese government is buying bitcoin,” let alone arming it, referring to recently made comments by angel investor and billionaire Peter Thiel.
Sometimes “he likes to say things that are provocative,” Novogratz said.
Thiel caused a furore on Tuesday when he suggested that bitcoin could be considered “in part a Chinese financial weapon against the US,” because, he argued, bitcoin undermines the US dollar’s status as the world’s reserve currency.