In a recent interview with CNBC’s “Squawk Box,” CEO at Galaxy Digital Michael Novogratz stated that Facebook could have taken a different approach when it announced the creation of Libra. This would have allowed the project to be kept alive as it was meant to be. Novogratz said:
“If Facebook would have come out originally saying ‘we are building a global payment system,’ I think there would have been a lot less angst. But, they came out and said ‘we are going to build this new currency’ and everyone turned their heads on fire.”
His remarks come a day after Mark Zuckerberg, the founder and CEO of Facebook, testified before the U.S. House Financial Services Committee about his plans to launch Libra, a global currency and financial infrastructure that aims to bank the unbanked.
According to Zuckerberg, the different concerns raised by lawmakers were taken into consideration and will be evaluated further. But, he urged the committee members not to embrace “reactionary laws” that could stifle “innovation” and would give a hedge to China.
Michael Novogratz believes that Zuckerberg made “some really good points” about what China is doing. He added that the Chinese government has decided to welcome blockchain technology instead of opposing it. By creating a digital renminbi, China is at the forefront of financial innovation, said the former Goldman Sachs partner.
“Like in any commodities and any assets there are lots of inputs that drive settlement and price. There has been a bunch of negative things that have happened recently. One is the Telegram ICO being kind of stopped on its tracks by the SEC… That was a kick to the stomach of the overall crypto ecosystem.”
The ex-hedge fund manager concluded that investors should not worry about the impact that a digital renminbi or Libra could have on the pioneer cryptocurrency. He said that they are more like “additives to Bitcoin” than a real threat.
“What China is working on, a digital renminbi, and what Libra is, which is going to be either a digital dollar or a digital basket of currencies or some version of that, are payment systems. They are currencies. Where Bitcoin is gold. Gold is not a threat to the U.S. dollar nor would Bitcoin be a threat to these currencies.”
Cover Photo by Michael Nagle/Bloomberg