The U.S. has said it will do whatever it takes to keep up with China on technology—and with China poised to unveil its digital yuan project, the U.S. could benefit from a similar answer to bitcoin.
Last week, it was reported by newswire Reuters the Trump administration will today announce a huge bump in spending for artificial intelligence (AI) and quantum research, amongst other technologies in order to keep pace with China.
White House adviser and U.S. chief technology officer Michael Kratsios told Reuters the budget will “ensure America continues to lead the world in critical technologies like AI and quantum. America’s economic strength and national security depend on it.”
The budget is expected to earmark nearly $2 billion for AI research by 2022, up from $973 million today, as well as $860 million in “quantum information sciences” spending within the next two years, double quantum spending in 2020.
The budget is also thought to include cash for the National Science Foundation, “for AI-related grants and interdisciplinary research institutes, rising to more than $850 million.”
In China, the country’s central bank is working on a digital version of the yuan, and, though there is no fixed date for its launch, some have suggested it could be imminent. A digital yuan could help China’s currency internationalize and challenge the dominance of the U.S. dollar.
The People’s Bank of China has confirmed the digital yuan won’t be “for speculation or require the support of a basket of currencies”—leaving many disappointed and others concerned.
Meanwhile, Federal Reserve chairman Jerome Powell has said he’s looking into the possibilities of a central bank digital currency, writing in a letter to lawmakers in November that the Fed is analyzing “the costs and benefits of pursuing such an initiative.”
And calls for the U.S. to begin development of a so-called digital dollar have been growing louder over recent months.
Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission, recently set up the Digital Dollar Foundation to work on the design and potential framework of a digital dollar.
Last year, in the wake of social media giant Facebook’s revelation it will launch its own digital currency this year, Trump attacked bitcoin, branding it and other cryptocurrencies “unregulated crypto assets” that can “facilitate unlawful behavior, including drug trade and other illegal activity.”
The bitcoin price, which has failed to return to its all-time highs set in late 2017 despite a rally pushing it over $10,000 this weekend, was given a substantial boost in the first half of last year by Facebook’s plans for a bitcoin-like rival.
It’s not clear whether a U.S. answer to bitcoin would use the blockchain technology that underpins bitcoin, however, China’s premier Xi Jinping sent shockwaves through the bitcoin and blockchain industry last year when he said his country will be prioritizing blockchain development.
“Blockchain is the technology of the future,” said Simon Peters, analyst at brokerage eToro.
“One question that needs to be posed is whether we have the capabilities and skills to cope with the inevitable increase in demand of highly technical roles,” Peters said, adding, “blockchain engineer jobs were the most popular vacancies on LinkedIn over the past week, more so than roles in artificial intelligence and cybersecurity.”
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