In an ever-continuing economic war between two of the greatest nations on the planet currently, US and China, maybe in yet another race of supremacy – this time in blockchain technology and cryptocurrencies – the former governor of the People’s Bank of China, Xiaochuan Zhou, states in a recent interview.
In the past month, several statements have come around surrounding Facebook Inc.’s latest development, the Calibra wallet and its associated Libra cryptocurrency. In a series of tweets sent out by cnLedger, a cryptocurrency news website in China, the former PBoC’s governor expects China to take precautions against Libra.
“Libra represents the trend of digital currencies, China should take precautions.”
This new Calibra wallet is built by a consortium of top companies in the world including Facebook, Uber, and Spotify, etc. It will be global and decisions on when and where not to operate will be on custodial wallet providers. However, this new plan has not all been taken with global acclaim but has received negative sentiments from various crypto enthusiastic states around the world including the United States, Singapore, India, and China.
During his time as governor, Zhou oversaw the introduction of a number of regulations that hurt the adoption process of virtual assets in the country such as the ban imposed on crypto-related activities such as ICOs in the country.
The former governor praises Libra coin as being a relevant competitor in the crypto market owing to its stable nature and its capabilities in enhancing cross border transactions in developing nations.
Despite the benefits Libra is set to offer the 2 billion market share it holds in its parent company, Zhou was quoted by cnLedger stating the AML compliance and custody of funds will be a big issue for the cryptocurrency.
In order for the government to counter the cryptocurrency which will definitely open up digital assets to hundreds of millions if not billions of people is through policy recreations in the country. He adds that it is essential for China as a state to keep up a stable monetary status and ensure they exhaust their resources on pure policy research.
“How should China cope with the recent trend? Zhou believes that people valuing Libra is inseparable from the global dollarization trend, and maintaining a strong monetary status may put China in a favorable position. China should take precautions and undertake policy research.” –
cnLedger tweets explaining Zhou remarks on Libra
He continues to say that the new currency’s strength will force other currencies to introduce exchange relations along with it. Beijing capital, however, thinks that the non-impeded crypto value circulation nature will undermine its strategic economic plan.
Earlier this month, Deloitte released a poll result that shows that China aims to use blockchain and decentralized technologies as a strategic weapon rather than a productivity tool. Finding a way to control Libra in the country is the first step in a longstanding battle with the US for supremacy.
In wake of all this uncertainty, the United States House of Representatives consisting more than 30 groups has demanded an official moratorium from Facebook specifically on Libra’s development. This is till all questions and concerns from the states are well addressed.