Wealthy investor Mike Novogratz says that the U.S. has its fate in its hands but will be at a major competitive disadvantage if it doesn’t come up with a digital dollar soon.
Such a move would be particularly important as China has fired the first salvo on the digital currency front, he explained.
“To me it is a existential crisis, we need a digital dollar,” Novogratz, chief executive of digital merchant bank Galaxy Digital
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The digital yuan has long been viewed as not just the evolution of money for China but also a way to compete with the U.S. and other major developed economies. The virtual yuan now being minted by China is 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 lent some support to the broader digital-asset complex, exemplified by bitcoin
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Novogratz says that the U.S. 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 of monetary and fiscal spending done to help stave off the worst of the economic aftershocks from the COVID pandemic.
“If our fiscal and monetary policy starts looking like its from a Banana Republic…you are going to run into some Minsky moment where confidence breaks down,” Novogratz warned. Chicago-born Hyman Minsky, who died Oct. 24, 1996, espoused a view that a period of distortions in the financial system eventually ends very badly.
Stock-market investors have been fretting about a surge in U.S. inflation, which has already created some wobbles in trading in the Dow Jones Industrial Average
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President Joe Biden was slated to meet with bipartisan members 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 that there is “zero evidence of the Chinese government buying bitcoin” much less weaponizing it, referring to comments recently made by angel investor and billionaire Peter Thiel.
Sometimes “he likes to say things that are provocative,” Novogratz said.
Thiel made waves Tuesday when he suggested that bitcoin could be thought of as “in part a Chinese financial weapon against the U.S.,” because, he argued, bitcoin undermines the U.S. dollar’s status as the world’s reserve currency.
