Libra’s Trustworthiness Would Go Up if Ran by the IMF, Ex-Chinese Central Bank Governor Affirms
Zhou Xiaochuan, the former head of the People’s Bank of China, the local central bank, has recently affirmed that Facebook’s Libra stablecoin could be more trusted if was managed by an organization such as the International Monetary Fund (IMF) instead of the Libra Association. He spoke during the 10th Caixin Summit, which happened in Beijing this week.
The executive served as the bank’s governor from 2002 to 2018 and he believes that there are several implications of an international digital asset that is governed by a group of private firms instead of public entities.
😳😳😳 ZHOU Xiaochuan, Chairman of PBOC (2002 to 2018) the MOST influential economist and monetary governor in China, publicly commented on Libra today
“People will question the motive of Libra as it’s initiated by a private company, it works better if it’s in IMF’s custody” pic.twitter.com/wMw8n1emI4
— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) November 8, 2019
By letting the system in the hands of international organizations, the process of handling the Libra would be much more transparent, as the motivations of private parties are not to be trusted. The Libra Association would certainly profit a lot from the project and there would be no way to know how the money is being used.
He suggested that the Libra could be a positive development in other scenarios, but that it letting a consortium of private companies be the ones ruling it was a big mistake.
Will China Be The First Country To Launch A CBDC?
China is among the countries which are most likely to launch the awaited version of a central bank digital currency (CBDC) soon. The project has been underway for years and it was accelerated now with the threats of the Libra being launched and causing financial troubles for China.
Mu Changchun, the deputy director of the People’s Bank of China, has recently revealed that the system will be centralized and use a two-tier system.