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China to speed up its cryptocurrency project
An official of the People’s Bank of China announced that the introduction of Libra, Facebook’s future cryptocurrency, has pushed the institution to speed up its digital currency project.
The South China Morning Post reported that, at a conference in a major university in Beijing, Wang Xin, director of the People’s Bank of China (PBOC) research bureau, said that Facebook’s new digital coin could have a major impact on monetary policy and financial stability in China.
« The Facebook project has forced the bank to step up its research to create its own digital currency, as Libra is widely used for cross-border payments, monetary policy, and even financial sovereignty », he said.
The PBOC has been working on the creation of a digital currency since 2014, in particular to replace cash and face the challenge posed by cryptocurrencies like Bitcoin. China has banned bitcoin trading in the fall of 2017 and may soon restrict or even ban mining. Last year, the PBOC was very active in the blockchain sector and filed a total of 78 patents related to this technology.
Wang Xin explained that the PBOC wanted to know exactly the basket of currencies that would support Libra.
« 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 », stated Wang Xin.