When talking to CNBC recently, the crypto expert and angel investor Anthony Pompliano suggested that the US government should turn the USD into a digital form immediately. His major argument was that in the near future all national currencies will be digital. China is already working on its central bank-emitted digital money.
If the US does not have a digital dollar, people will be more attracted to buying ‘China Coin’, he believes. He also said that the ‘digital yuan’ in that case would be wider adopted.
A financial crisis could be good for Bitcoin, experts say
In his earlier tweets, Pompliano and other crypto industry leaders stated that the worse is the situation with the current global economy due to central banks’ policy, the higher chances will be that investors and regular users will choose to go into Bitcoin.
Meanwhile, Steen Jakobsen, the chief economist and CIO at Saxo Bank, has recently stated to CNBC that “weakening the dollar is the last throw of the dice in rescuing the global economy”.
Monetary policy of the FED has failed, says Jakobsen
The economist believes that the recent interest rate cuts made by the Fed Reserve and the recent QE measures are worsening the current situation in the global economy since the US dollar is the global reserve currency.
Monetary policy has reached the end of a very long road and has proven a failure.
The ECB also followed this path in the summer, cutting the interest rate by 10 basis points down to -0.5 percent and launching QE.
In a global system of failed monetary policies and a long and difficult path to fiscal policy, there is only one other tool left in the box for the global economy and that is lower the price of global money itself: the U.S. dollar.
Presently the US state debt totals $240 trillion around the globe, which is approximately 240 percent of global GDP. The economist says that a very large part of this debt is denominated in the USD and if the USD gets stronger this will not be good since the USD is a global safe-haven asset.
Jakobsen clarified his point by saying:
If the dollar rises too much, the strain in the system increases: not only for U.S. exports, but also for the emerging market with its high dependence on USD funding and export machines.
As the recent Fed’s dollar printing measures took place, Anthony Pompliano and other experts suggested that the Bitcoin price would surge.
We are all underestimating the potential of Bitcoin.— Pomp 🌪 (@APompliano) October 2, 2019
Bitcoin is used in crisis-stricken countries
Countries with poor economic situation and hyperinflation have been turning to crypto recently. The brightest example is Venezuela. In 2018, the country attempted to solve the problem of its hyperinflation by launching its own oil-backed crypto, Petro.
However, now its citizens prefer to use Bitcoin and Dash for everyday purchases. As reported by U.Today recently, the country’s government even considers buying Bitcoin and Ether to form its international reserves.