Libra faces strong opposition and China embarks on a race to launch its own global cryptocurrency

Facebook’s cryptocurrency plans looked shaky this week after a handful of high-profile members bowed out of the project. But while libra slowly gets off the ground, China is looking to launch an alternative.

The People’s Bank of China announced earlier this year that it was working on a digital currency backed by the yuan, reportedly inspired by Facebook’s announcement. Analysts and crypto industry leaders are highlighting geopolitical implications of China launching a digital currency first — especially if libra hits a brick wall with U.S. regulators.

“China has been incredibly strategic about how they think about cryptocurrency,” Brad Garlinghouse, CEO of Ripple, told in a phone interview. “They have been dependent on the U.S. dollar as the global reserve currency — to the extent that other currencies emerge, and they can help propagate those, they’re intrigued by that.”

China’s proposed digital currency would bear some similarities to Facebook’s libra, a senior central bank officer said this summer, according to a transcript of a speech that was published online. He also said the digital coin could be used across major payment platforms, including China’s ubiquitous WeChat and Alipay.

RBC Capital Markets analysts told clients this week that based on recent conversations and meetings in Beijing, China’s plans are moving quickly. The People’s Bank of China “has expedited its development of a Central Bank Digital Currency” after Libra’s announcement in June, the analysts said.

Cryptocurrency would add to a long list of existing tensions between the global superpowers. The U.S. and China are locked in a stalemate on trade, and a battle for dominance in 5G, the mobile network promising faster data speeds. The U.S. Treasury Department has also labeled China as a currency manipulator — a complaint that could be exacerbated if a yuan-backed cryptocurrency takes off.

Source: CNBC

 Trader Georgi Bozhidarov

Read more:
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance