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China Accelerates Own Cryptocurrency Plans in Response to Facebook’s Libra
The People’s Bank of China is apparently worried about Facebook’s digital currency, Libra.
“If [Libra] is widely used for payments, cross-border payments in particular, would it be able to function like money and accordingly have a large influence on monetary policy, financial stability and the international monetary system?” asked Wang Xin, director of the People’s Bank of China (PBOC)’s research bureau during an academic conference hosted by Peking University’s Institute of Digital Finance.
And that’s not all, the PBOC official also took umbrage on Libra’s correlation to the greenback, saying that “if the digital currency is closely associated with the US dollar, it could create a scenario under which sovereign currencies would coexist with US dollar-centric digital currencies. But there would be in essence one boss, that is the US dollar and the United States. If so, it would bring a series of economic, financial and even international political consequences.”
There are many ways to read this, but in any case, the release of the Libra white paper last month has spurred the PBOC into stepping up it’s research into creating its own cryptocurrency. The central bank started looking into it back in 2014 and it set up a research institution for it three years later. It has yet to announce any progress however, and China “maintains a blanket ban on new listings or trading of any digital currency, including bitcoin, as Beijing regards digital tokens as a source of financial risk.”