China is one of the leading countries when it comes to online payments. Reportedly, there are more than 580 million mobile payment users in China. Chinese citizens can even use WeChat to send or receive payment on their phones. This is essentially what Facebook is planning to achieve with its cryptocurrency, Libra.
Money Market Fund Being Dubbed as a Basket of Currencies
Furthermore, China implements the concept of Money Market Mutual Fund to back the currencies, which is similar to the ‘basket of currencies‘ that Facebook is using to back the value of Libra. In fact, Ant Financial is the world’s largest money-market mutual fund. It includes currencies and Government debt securities which provide low-risk characteristics. Dovey Wan, a Market analyst, tweeted,
for those who use Alipay, it has achieved exactly what Libra is trying to do years ago WITHOUT any token- its backend is world’s biggest money market fund and front end is world’s biggest payment processors, natively integrated millions of merchants
Apart from Alipay, Tenpay also provides the same functionality to Chinese citizens. Mati Greenspan, Senior Market Analyst at eToro noted,
Love how # marketing makes this sound so innovative. “Send money by text” This is the screenshot from my WeChat app on my phone. Tenpay has been doing this for a decade in Asia. No blockchain required!!
David Marcus, the Head of Calibra and Co-Creator of Libra and formally with PayPal, recently spoke on the difference between Libra and Bitcoin. He also confirmed that Libra is a medium of exchange different from Bitcoin. Samson Mow, a Senior Crypto-Analyst tweeted,
Totally agree with David. They are not in the same category. Libra is the western clone of Alipay, marketed as a cryptocurrency.
Before bitcoin, before Libra, there was QQ coin.
QQ coin is a virtual currency used in China to make online payments.
‘Cryptocurrency and Blockchain’ are the only new features that Libra seems to be adding to the system. Nevertheless, while it guarantees a higher degree of transparency, the Money Market funds are also under constant surveillance of the Financial Watchdogs, which makes it entirely secure.
Ant Financial Services Group has also invested heavily in India’s most extensive payment processor Mobile Application, PayTm. Nevertheless, the value on Paytm is not backed by a Money-market fund; it is exchanged at a 1:1 ratio with the Indian Rupee. Similar to China, the likelihood of releasing Facebook’s cryptocurrency in India is also low.
Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com