By
Chimamanda U. Martha
April 12th, 2024
Michael Novogratz warned that the United State’s reserve status might soon be undermined by the Chinese blockchain and crypto revolution.
In recent weeks, China appears to be retracting its hard stand against crypto activities within its jurisdiction. Notably, even President Xi Jinping encouraged Chinese investors to take up blockchain and crypto activities in an attempt to diversify the Asian economy.
These developments have made billionaire Michael Novogratz warn that the United State’s reserve status might soon be undermined by the Chinese revolution. In his statement, he insists that China is already ahead in various areas including fintech. He believes that the U.S. is just playing catch-up.
Warning to China
His latest comments come in the wake of a renaissance in China to enhance blockchain development and boost the Yuan into becoming a globalized currency. According to the recent statements by Chinese President Xi Jinping, he pledges support for the nascent industry.
President Jinping supporting the industry shows that the government has taken a bullish stand on the issue. As we published, the president and his government are considering exploiting the potentials that blockchain and crypto technologies have to offer.
Huawei and the Chinese Central Bank signed agreements barely a week ago. These agreements involve blockchain development activities. That move aimed at fast-tracking the development of a yuan-based cryptocurrency.
Mark Zuckerberg, Facebook CEO, had earlier voiced concerns about the Chinese government entering the crypto game. That was during the Libra Senate hearing that took place in October.
Zuckerberg used that session to urge the lawmakers to support the Libra network. He also insisted that countries like China were on the verge of overtaking the United States in this nascent frontier. He also believes that the government would have to develop a digitized dollar currency to guarantee financial leadership.
Pressure Grows on Fed
Various U.S. lawmakers have called upon the Federal Reserve to develop a similar platform in the wake of these events. A member of the United States Federal Trade Commission, Rohit Chopra, has already advised the Federal Reserve. He told the Fed to quicken the development and launch of the much-anticipated ‘FedNow Service.’
This new service is slated to become a round-the-clock payment system that will enable instant fund transfers everywhere in the U.S. like blockchain networks. Rohit requested the agency to move quickly to ensure that no major private enterprises seize control of the critical monetary ecosystem.
It is still unclear currently whether the Federal network will be crypto-based. There has been some opposition to the crypto networks idea. Various politicians like Dr. Ron Paul have questioned the relevance of such a system when there is the Clearing House that provides fast money transfers and is already tried-and-tested.
As matters stand currently, only time will tell the winner of the multiplex race.