Facebook’s announcement of a crypto project took the world by storm, and has resulted in a series of consequences, both expected and unexpected. However, it seems that the Libra coin will have some direct competition in the not so distant future, according to reports coming from China.
The CEO of Huawei, a prominent tech company based in China, seems to believe that there could be serious competition for Facebook’s market share if China decided to launch a cryptocurrency of its own.
A Similar Value Proposition
Ren Zhengfei, the Executive in question, observed at a recent press conference in Italy (and quoted by local news site Sina) that if Facebook had managed to get so far (it unveiled the project last month, but it will not be up and running until the first half of 2020, at least,) then China could do the same: develop a digital currency with a similar value proposition as Libra.
“China can also issue such a currency by itself. Why wait for others to issue it? The power of a country is always stronger than an Internet company,” he said whilst directly providing an answer to a question from the press.
Regarding the rise of Libra, the central bank of China (dubbed as the People’s Bank of China, or PBoC,) has taken a similar stance to that of many governments around the world: it is concerned about several aspects, including the possibility of Facebook’s digital currency to threaten China’s financial present and future.
At A Disadvantage
According to a specialized crypto news site, Wang Xin, who is currently the Director of the PBoC, stated that China would be running from behind if Libra is pegged to the value of the United States’ dollar.
“If so, it would bring a series of economic, financial and even international political consequences,” he said. Beijing, China’s capital city, is said to be developing a cryptocurrency project of its own, but details about it haven’t yet become public.
Libra: A Controversial Project from the Go
Libra unveiled its white paper in June, after months of speculation about the details of the project. However, after the announcement, several governments, central banks, investors, lawmakers, and other members of the crypto community have expressed their concern about how to properly regulate the ecosystem and the use of the stablecoin per se.
One of the nations in which Libra has raised the most controversy has been the United States. The country is still trying to comprehend the project and how to handle everything that surrounds it. It has been a hot topic at the Congress. However, the crypto community remains critical of the attitude that some regulators and lawmakers have taken against the asset, especially since it has not been released as of now.
“We’re putting regulation before the innovation — Facebook’s just announced Libra; they haven’t even been able to ship it yet, and the regulators are all over them,” were the words of known investor Tim Draper on CNBC Monday.
By Andres Chavez