When the Soviet Union launched Sputnik into orbit in 1957, Western policymakers in the United States and elsewhere were shocked into recognizing that they had fallen behind their arch-rival. Having been caught off guard, they rapidly mobilized a sweeping effort to catch up, in the process laying the foundation for GPS, Starlink broadband services, military communications and many other technologies that keep today’s modern world humming.
The world’s poor should not be paying the price for disagreements among the world’s largest creditors. But that will continue to happen until the international community – especially the United States, China and other major IMF shareholders – strengthens and streamlines the debt-restructuring process.
Today, blockchain and digital assets hold the same transformational potential that satellite communications did for an earlier generation. Yet despite calls for more US leadership in this area – including in US President Joe Biden’s own “crypto executive order” last year – the US is at risk of falling behind globally.
In the original space race, the US federal government led a nationwide campaign to invest in Stem (science, technology, engineering, and math) education, created NASA and eventually landed astronauts on the moon. In the end, winning the race also gave the US a dominant position in many key technology sectors. America succeeded because the government gave free enterprise and human ingenuity a common destination and a shared mission.
Today, those vying for an edge in digital currencies include both governments and private actors, some of which are openly hostile to the US and its allies. Currently, 114 countries (representing 95% of global GDP) are considering whether to launch a central bank digital currency, and the ecosystem of cryptocurrencies and digital assets has exploded in size (and sometimes simply exploded) in recent years.
For its part, the Biden administration has fully committed to keeping the US at the forefront of technologies that bear on national security and future economic competitiveness.
The bipartisan Chips and Science Act of 2022 provides massive government investments to bolster domestic semiconductor manufacturing and research and development in quantum computing, artificial intelligence and other fields. And for similar strategic reasons, the administration has also tightened export controls to prevent China from reaping the full military and economic advantages of American technology. As Biden’s national security adviser, Jake Sullivan, explained last year, the US intends to “maintain as large of a lead as possible” over its rivals.
Money is just as strategically important as semiconductors. It is no secret that the US dollar’s role as the world’s dominant reserve currency has long been a major source of America’s global power. The dollar matters not just because it is commonly used to settle international transactions, but also because it underpins a much broader rules-based system of payments, finance and savings.
