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Pomp: The U.S. Must Tokenize the Dollar to Remain Competitive

pomp:-the-us.-must-tokenize-the-dollar-to-remain-competitive
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In a recent interview with CNBC’s Squawk Box, Anthony Pompliano, the co-founder of Morgan Creek Digital, has argued that the United States must tokenize the dollar to remain competitive in the shifting global financial landscape.

Pompliano urged lawmakers to “tokenize the dollar immediately,” asserting that China is in the process of developing a digital yuan, with other countries aiming to soon follow suit.

He argues that the status of the U.S. dollar as the global reserve currency is contingent on the currency’s tokenization, warning that if “China has a digital yuan, and we don’t have a digital currency, it will be much more accessible for people to buy the Chinese yuan in other parts of the world than the U.S. dollar.”

As such, Pompliano argues that a failure for the U.S. to quickly move to digitize its dollar may lead to a tokenized yuan facilitating greater global adoption of Chinese currency over the US dollar.

Pompliano also predicts that there will not be competition between non-digital and digital currencies as “every currency will be digital” in the near-future, adding that tokenized currencies will give rise to “competition of monetary policy.”

National Digital Currencies Avoid Sanctions

While numerous national governments have sought to develop distributed ledger-based money commodities in recent years, most efforts appear to be attempts to bypassing U.S. sanctions, rather than displace the dollar as the world’s reserve currency.

The most publicized national cryptocurrency project has been Venezuela’s Petro – a token purportedly backed by the country’s energy reserves. Despite several efforts to drive Petro adoption within the Venezuela economy, including the mandating of Petro’s use as payment for passport fees and as a means to finance the construction of public housing, reports have evidenced little adoption of the Petro among Venezuelan citizens.

Seeking to bypass U.S. sanctions, Iran has explored distributed ledger technology for several projects. At the start of the year, it was reported that Iranian firm Kuknos Company had launched a gold-backed cryptocurrency in partnership with four local banks to tokenize assets held by the Iranian financial institutions. During July, reports indicated that Iran was planning to launch a second gold-backed cryptocurrency to allow the “optimal use of Iranian banks’ frozen resources.” The following month, a platform was established to facilitate crypto donations to Iran following suggestions that U.S. sanctions were preventing the country from receiving aid after Iran’s south was struck by devastating floods.

Despite recent reports claiming that China was almost ready to release its central bank-backed virtual currency, Yi Gang, the head of the People’s Bank of China, stated that Beijing has no timetable for the launch of its digital currency during last week.

Yi added that the currency still requires further “researching, testing, trials, assessments, and risk prevention.”

People Will Adopt Digital Currency Outside of Government Control

When questioned about the attraction of bitcoin in face of the digital fiat currencies, Pompliano asserts his belief that “people are going to opt for something that is not manipulatable, is not seizable, is not censorable, not debasable, etc.,” adding:

“I think that […] over time, more and more people are going to choose a currency that a government does not control.”