Photo Credit To Finterra Technologies Via Flickr
A few weeks after the Facebook Libra project was announced, the Chinese Central Bank announced that its own crypto coin was ready for launch. New reports suggest that it was worried about Facebook Libra launching before it could launch its digital yuan. Visionary Financial founder Jeff Guzzi talks about this briefly on his interview with BloxLive TV, which will be airing around August 26 / 2019.
Report Says china wants to Beat Facebook Libra
According to China Daily, a mouthpiece of the communist party, China wants to beat Facebook Libra by launching its own crypto coin before Facebook can get regulatory approval in the US. The Facebook Libra coin will be a stablecoin, whose value is pegged to a basket of fiat currencies.
Libra is currently facing what seem to be insurmountable odds. It recently faced an absolute beat down on Capitol Hill when hearings over the project were held. Politicians on both sides of the aisle were against this project from the day it was announced. One reason why Congress might be so against this project is that the company has been involved in numerous scandals, chief among them being the mishandling of user data.
This regulatory uncertainty could give the Beijing-backed stablecoin the chance to launch before Libra. The Central Bank of China has been working on a digital coin for the past five years. In 2018, it began to add significant resources into the blockchain. At the start of August, a senior official at the bank announced that the digital coin was nearing launch.
A major difference between the Libra project and the Chinese central bank project china wants to tighten control over crypto and fight capital flight. The Facebook project, on the other hand, plans to promote a financial system that is open and inclusive.
China Has the Chance to beat Facebook
The Facebook Libra near term future is uncertain. However, this is not the case for Beijing, which will not face any regulatory hurdles when they launch their coin. This coin will likely copy some of the best features of Libra while also ensuring China has control over the crypto space. While it will not be a true crypto coin, the digital yuan is going to be quite similar to the Libra project.
China is especially intrigued that Facebook will issue Libra via a consortium of over 24 companies. To mirror this move, authorities plan to experiment by enlisting state-run and private firms to be part of the effort undertaken by the Central Bank. The director of research in the fintech and cybersecurity at Renmin University made this revelation. Further testing of China’s digital coin was needed before it could launch.
This admission that Libra spurred China to act is even more significant when you consider that it came from China Daily, which is a state-owned paper. While it is not directly run by the state, it is essentially a government propaganda tool. This says a lot about China but it might also say a lot about Libra, which has managed to spook the Chinese government to speed up the launch of its crypto.