A senior Central Bank Official has compared China’s proposed new digital currency to Facebook’s Libra Coin.
China’s Digital Currency To Have Similar Design As Libra
Mu Changchun, deputy director of the People’s Bank of China’s payments department, recently said that China’s new digital currency would help in protecting the country’s foreign exchange sovereignty. Mu said China’s digital currency would strike a perfect balance between allowing anonymous payments and preventing money-laundering. Also, it would be somewhat similar to Libra in design but would not be a direct copy.
He further said,
“Why is the central bank still doing such a digital currency today when electronic payment methods are so developed?” To protect our monetary sovereignty and legal currency status we need to plan for a rainy day.”
More importantly, the tokens would reportedly be as safe as central bank-issued paper notes and could be used even without an internet connection. Furthermore, they can also be used on Tencent’s (0700.HK) WeChat and Alibaba-backed (BABA.N) Alipay.
China’s Central bank set up a research team in 2014 to explore the makings of their digital currency. Primarily, it was to cut costs incurred in circulating traditional paper money and boost policymakers’ control of the money supply. Per reports, the currency could be ready as soon as Nov. 11.
Libra Continues to be Embroiled in Controversies
Facebook’s proposed currency continues to spark concerns among global regulators, as it could quickly become a dominant form of payment which will foster money laundering. This is due to the social network’s massive cross-border reach.
As per recent reports, millions of Facebook user’s phone numbers are now floating online. The report suggests that the giant social media company’s data security system was bypassed. Furthermore, the affected server houses more than 419 million records across various databases on users across locations, including 133 million records on U.S.-based Facebook users, 18 million of users from the United Kingdom, and 50 million records relating to Vietnamese Facebook users.
China’s digital currency can indeed be of immense use to users as it would also allow transactions to continue in situations in which communications have broken down, such as an earthquake. Would China’s digital currency bring forth unprecedented avenues for the Chinese economy? Let us Know!