International

Former China Bank Gov Against Rushing Digital Currency

cryptocurrency

A former Chinese deputy governor is urging President Xi Jinping to rethink his response to Libra after the U.S. hearing last October.

Instead of making its own digital currency, the deputy, Zhu Min, is asking Xi to reconsider rushing that process.

China has actually been looking at making its own CDBC since 2014. But Facebook's announcement of its crypto coin Libra stoked alarm in other governments and agencies across the world. Officials in China are concerned that Libra could give the U.S. a bigger advantage on the world stage, especially since the Chinese yuan is not among the assets backing Libra.

The South China Morning Post on Sunday (Jan. 26) reported that the debate on whether China should issue its own currency has been going on for some time now.

Zhu Min told Sina.com that he thought it was "critically important" for China to join the talks about Libra. He said Digital Currency Electronic Payment, the central bank's digital currency research scheme, is a natural process.

All of this indicates that China isn't looking at any specific date yet to launch its own cryptocurrency.

Zhu isn't alone in asking China to reconsider its crypto strategy — he's one of a group of researchers, governors and economists advising such. Their mindset is that since digital currencies aren't restricted to just one country, as traditional currencies would be, nations should work together on finding paths forward with the new technology. And they think China should be a part of that teamwork.

Ba Shusong, a former researcher at China’s State Council Development Research Centre, agreed with Zhu, saying that the issues around digital currencies, such as their lack of borders, could cause trouble with central banks and regulators.

The discussions in China are just part of the broader international discussion around cryptocurrencies.
Bank of France Governor Francois Villeroy de Galhau voiced support for central banks being the ones to issue digital coins rather than private companies like Facebook. And there's talk among Japanese officials about making its own crypto coin as well.

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