According to the South China Morning Post (SCMP), a digital token from the Central Bank of China is already under development. The authorities have taken such a step because of Facebook and its infrastructure for its own cryptocurrency Libra, which will operate outside the banking system. Supporters of Bitcoin are predicting that the release of the Chinese national digital currency can stimulate mass adoption of BTC.
SCMP quotes the Director of the research Bureau of the people’s Bank of China (PBOC) Wang Xun.
“If Libra will be widely used for payments, especially cross-border — will be able to function as money. Accordingly, it will have a big impact on monetary policy, financial stability and international monetary system.”
NBK has already received from Beijing’s permission to start the process of developing their own token.
First and foremost, the authorities fear that Libra could threaten Chinese cross-border payments and even financial sovereignty. This is partly due to Facebook plans to assign a token to the U.S. dollar. And although Libra is not even running and has no token, governments and banks around the world are closely watching this project. Further, the representative of the NSC noted the following.
“If digital currency will be closely linked to the US dollar, then there is a scenario in which a sovereign currency will co-exist with digital currencies that are focused on the dollar. But in General over digital currencies will stand only one boss — the dollar and the U.S. government. This can lead to a number of economic, financial, and even international political consequences.”
Why the situation is favorable for Bitcoin?
And although the van did not mention the decentralized cryptocurrency, after the news in the community talking about the fact that the launch of Libra will also have a positive impact on the popularity of Bitcoin. This only adds fuel to the fire for the NSC. For example, in his Twitter wrote co-founder Morgan Creek Digital Anthony Pompliano, “it will eventually lead to an accelerated adoption of Bitcoin”.
However, as reported by Bitcoinist, China’s fears about the project, Facebook may be unnecessary if regulators in other countries will have time to implement the relevant regulation. Between the giant social network and the US government has already sparked debate in which lawmakers are asked to pause and wait for further instructions.
Other sources also flashed the information that, for example, Russia will automatically deny not only the token, but all belong to the Facebook platform, if the project will still be run. Later, the Russian government has said it is not going to issue a new legislation for the regulation of Libra, though, and spoke against the project in a negative way — say, a digital currency will help the people to bypass the banking system.