According to a South China Morning report dated July 8, it appears that the Chinese Central Bank is currently developing its own cryptocurrency in response to Libra, which would be considered as a risk to the country’s financial system.
Wang Xin, Director of the Research Office of the People’s Bank of China (BPoC), considers that if Libra is widely used for payments, particularly cross-border payments, then its difference with a sovereign currency would be greatly reduced and would therefore potentially have a major influence on the monetary policy of the countries authorizing it.
This cryptocurrency was created specifically because of the unclear role that the dollar will have on Libra. Indeed, according to Mr. Wang: “If the digital currency is closely associated with the U.S. dollar, it could create a scenario under which sovereign currencies would coexist with U.S. dollar-centric digital currencies. But there would be in essence one boss, that is the U.S. dollar and the United States. If so, it would bring a series of economic, financial and even international political consequences.” Which therefore doesn’t seem to be to the Chinese’ taste.
For this reason, PBoC would have received the approval of the main Chinese administrative authority, the State Council, to start working with other banking institutions to develop a potential competitive cryptocurrency.
The universities of Beijing, Renmin, Zhejiang and Shanghai Jiao Tong have reportedly launched an initiative on the potential digital financing to be put in place.
The development of this Chinese national cryptocurrency sounds like a renewal for the Blockchain world, it is true that China is known to be rather reluctant to this technology, notably through the prohibition of trade in Bitcoin, ICOs and crypto exchanges.
Although we welcome the renewed interest that cryptocurrencies may have at this time, they seem to indicate that States wish to take over these technologies. The primary ideology of Bitcoin and decentralization seems to be moving further and further away.
To be continued.
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Passionate about high tech and IT, I’m marketing and communication consultant for multiple companies and writer about the Blockchain and Cryptocurrencies