Facebook's plans for its cryptocurrency seem increasingly shaky as more and more large participants exit the project. As Libra runs into launch difficulties, China is ready to launch an alternative.
The People's Bank of China announced earlier this year that it was working on a digital currency based on the renminbi, inspired by the Facebook project. Analysts and leaders in the crypto industry emphasize the geopolitical consequences of China launching its own digital currency, especially if Libra stumbles upon a brick wall with the decisions of US regulators.
“China has applied strategic thinking in cryptocurrencies,” said Brad Garnlinghouse, CEO of Ripple. “They were dependent on the US dollar as a global reserve currency, so they are now interested in occupying a new niche.”
The digital currency proposed by China will have some similarities with Libra, said one representative of the Central Bank of China this summer, according to a transcript of a statement published on the Internet. He also said that the digital coin will be used in a number of payment platforms, including the Chinese giants WeChat and Alipay.
Cryptocurrency is added to the list of contention between the two largest economies in the world. The United States and China were not only in a state of trade war, but also now there is a struggle for 5G - a new communication protocol with a high data transfer rate. The U.S. Treasury Department has declared China a currency manipulator, and such statements may intensify after Beijing launches its own yuan-backed cryptocurrency.
As Facebook’s libra faces headwinds, China is racing to launch its own global cryptocurrency, CNBC, Oct 15