Wealthy investor Mike Novogratz says the US has its fate in its hands, but it will be at a major competitive disadvantage if it does not soon come up with a digital dollar.
Such a move would be particularly important because China has launched the first bailout on the digital currency front, he explained.
“It’s an existential crisis for me, we need a digital dollar,” Novogratz, chief executive of Galaxy Digital GLXY, said
said for MarketWatch in an interview on Friday, before the second part of a series of virtual events “Investing in Crypto” by MarketWatch and Barron, which will continue on Wednesday.
The digital yuan has long been considered not only the evolution of money for China, but also a way to compete with the US and other major developed economies. The virtual yuan that is now being struck by China is controlled by its central bank, which will issue the new electronic currency, the Wall Street Journal reported.
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China’s apparent embrace of a digitized yuan has provided some support for the broader complex of digital assets, exemplified by bitcoin BTCUSD,
a decentralized cryptocurrency that has long been seen as a potential repository if not a payment system by enthusiasts. At 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 tanker,” referring to the trillions of dollars in monetary and fiscal spending made to help avoiding the worst economic repercussions 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 starts to look like its own in a banana republic … you will encounter a Minsky moment when confidence collapses,” Novogratz warned. Chicago-born Hyman Minsky, who died on October 24, 1996, argued that a period of distortion in the financial system would end very badly.
Investors on the stock market feared a rise in US inflation, which has already created some fluctuations in trading in the DJIA Dow Jones Industrial Average,
and the S&P 500 SPX index,
in recent weeks. But record highs for stock markets on Friday imply that investors could accept the Fed’s expectations for a slow normalization policy approach and a transient burst of inflation following the coronavirus crisis.
President Joe Biden is expected to meet with members of the bipartisan congress on Monday in an effort to gain support for his $ 2.4 trillion infrastructure plan, White House Press Secretary Jen Psaki said on Friday. informed CNBC.
Novogratz, meanwhile, said there was “zero evidence that the Chinese government was buying bitcoin,” let alone weapons, referring to recent comments 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 US” because, he claimed, bitcoin undermines the status of the US dollar as the world’s reserve currency.