China is on a fast track to becoming a global digital currency power. Billionaire Michael Novogratz warns that the country might undermine the United States' reserve status. Some politicians are wary about embracing cryptocurrency networks. Billionaire Michael Novogratz has warned that the United States' reserve…
Billionaire Michael Novogratz has warned that the United States’ reserve status is likely to be undermined by China’s blockchain and cryptocurrency revolution. In the forewarning, he underscores that China is already ahead in some areas such as fintech, and the United States is merely playing catch-up.
His remarks came in the wake of a renaissance in China to further blockchain development and boost the yuan into becoming a globalized currency. Recent statements by Chinese President Xi Jinping pledging support for the industry affirm the government’s stance on the issue as well as the level of consideration for its potential.
Just last week, Huawei and the Chinese Central Bank signed agreements involving blockchain development. The move was apparently to fast-track the development of a yuan-based cryptocurrency.
Facebook CEO Mark Zuckerberg had previously voiced concerns about the Chinese government entering the crypto game. This was during the Libra Senate hearing, which took place last month.
He used the session to urge lawmakers to support the Libra network while stressing that countries such as China were on the verge of overtaking the United States in this new frontier. He asserted that the government would have to create a digitized dollar currency to guarantee financial leadership.
In light of these events, some notable U.S. lawmakers have called upon the Federal Reserve to come up with a similar platform. Rohit Chopra, a member of the United States Federal Trade Commission, has already asked the Federal Reserve to hasten the development and launch of the much-awaited “FedNow Service.”
The service is slated to be a round-the-clock payment system that will allow instant fund transfers throughout the country in a manner akin to blockchain networks. In his letter to the Federal Reserve’s Board of Governors, Rohit asked the agency to move quickly to prevent major private enterprises from seizing control of critical monetary infrastructure. It is not clear at the moment whether the Federal network will be cryptocurrency-based.
When it comes to crypto networks, there’s been some opposition to the idea. Some politicians, such as Dr. Ron Paul, have called into question the relevance of such a system when there is the Clearing House, which offers fast money transfers and is tried-and-tested.
As things stand, only time can reveal the eventual winner of this multiplex race.
This article was edited by Sam Bourgi.