Facebook’s Libra is Forcing China to Develop its Cryptocurrency At a Faster Rate
China’s central bank has stepped into research to expand it's a digital currency. This is due to a possibility that Libra could pose a problem to Chinese cross- border payment, monetary policy, and financial sovereignty.
The Peoples Bank of China said that the new digital currency is almost ready and could be launched very soon. It will involve significant regulatory issues like anti-money laundering, anti-terrorism financing, and anti-tax evasion. Yi said that the development of the new digital coin:
“ requires research, testing, trials, assessment, and risk prevention.”
What to Expect from China’s new Currency
China proposes that the new Cryptocurrency will have similarities with Facebook’s Libra. The PBOC also plans to avail the currency through the states’ owned bank and online payment platforms. The transacting platforms must be owned by tech giant Tencent, China UnionPay, and Anti Financial.
It is to be used primarily for online transactions. Researchers say that the digital coin’s primary goal is to accelerate the use of yuan worldwide and counter other cryptocurrencies like Bitcoin. Alicia Garcia –Herero, noted that:
“it would promote yuan’s internalization for cross-border payments.”
How Facebook’s Libra has propelled the development of Chin’s new coin
The Facebook Libra is a stable coin whose value is tied to various currencies, to limit price vitality. This development could pose a significant challenge to the use of China’s yuan internationally. China maintains a high currency control globally and is suspicious that Libra would extend the US dollar dominance.
Shen Jianguang said that China is well-positioned for the international digital currency leader. He told others that
‘’the digital currency will be an area where China overtakes others.’’
RBC analysts said that ‘’China has expedited its development of a Central Bank digital currency.’’
It was after Facebook announced its currency in June. China’s development is a competing strategy, and the two currencies could rival each other in the emerging markets.