Facebook's universal digital currency project Libra might be at the receiving end of regulators and governments around the globe, but looking at China's accurate adoption of blockchain technology and the slated launch of its central bank-issued digital currency (CBDC) by the end of this year, the US might need an ally like Libra to help it maintains its financial superiority in the world market.
China's ability to adapt and its massive workforce combined with a streamlined form of centralized governance give it an advantage over other, and this is the reason despite being indifferent to cryptocurrencies in the last couple of years, the launch of digital yuan would definitely give it an upper hand on other nations.
Facebook's CEO warned about the same during his recent appearance before the House Finance Committee where he claimed that if Libra is not given necessary regulatory clearance for its scheduled launch in 2020, someone else would point upon this opportunity without the regulatory activity that they are facing.
“A digital payment system is going to be important in the future. If America doesn’t lead on this, others will. Foreign companies or countries may act without the same regulatory oversight or commitment to transparency that we have.”
Regulators and policymakers have been going hard at Facebook' libra for its centralized working model and have claimed that giving a green light could devalue the US dollar in the international trade market and pose a threat to economic sovereignty.
Facebook's troubled past and mishandling of data has proven to be an Achilles heel as many senators have continuously pointed towards the fact that Facebook has been a serial offender in breaching user policy and mishandling private data.
Others have argued that only the state has the right to offer money, and thus giving that power in the hands of a private company does not sound like a great idea.
China Is Acting Fast and other Countries might be Left behind by Year's
Although most of the concerns raised by the regulators are valid, it is important to note that there is an ongoing tussle over the throne of becoming the leading superpower state of the world. The US has been the leader for decades, but as we head towards the 22nd century, China is more than equipped to take that position.
The dominance of the US dollar in the international trade market allowed the US to maintain supremacy over other states with the power to implement sanctions. As we move towards a digital financial future, many countries have already started to experiment with a CBDC to avoid such sanctions.
China will become the first country to issue a CBDC and with its technological supremacy and dominance it might peg the US to take the throne away if they don't act fast on it, Libra might be flawed in many ways, but there is no denying that with over a 1 billion user base on Facebook and several million on WhatsApp, Instagram, and Messenger, it could very well be the trump card to compete against China.