A People’s Bank of China (PBoC) official said that the upcoming launch of Facebook’s Libra could speed up his bank’s development of its own digital currency.
In fact, if Libra becomes widely used for international payments, Wang Xin, head of the research bureau at the PBoC, questioned “would it … accordingly have a large influence on monetary policy, financial stability and the international monetary system?” As a result, PBoC is giving the situation “high attention,” potentially causing the bank to speed up the development of its own digital currency, which it has been working on for years.
“We had an early start … but lots of work is needed to consolidate our lead,” Wang said at an event at Peking University’s Institute of Digital Finance on Monday (July 8), according to CoinDesk.
Facebook announced last month its plans to launch its own stablecoin, which has already found backing from over a dozen companies, including Visa, Mastercard, PayPal Holdings and Uber Technologies on it. Every contributing firm or venture capitalist taking part in the project will invest about $10 million in a consortium that will be used to govern the Libra coin.
The social media giant explained that Libra will be linked to different fiat currencies and government bonds. Wang noted that China is particularly interested in whether the crypto will be “closely associated” with the United States dollar, which could mean that national fiat currencies would work alongside “US dollar-centric digital currencies,” which would be an issue for China.
“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,” said Wang.
But while Wang confirmed that the PBoC had been working on developing its digital currency, he didn’t reveal when it will be ready to hit the market.