China’s National Cryptocurrency Fills Same Role as Libra

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China had been working on its government-backed, central bank released cryptocurrency for some time, but mostly in the shadows which out much detail. However, following the announcement of Facebook’s Libra cryptocurrency, the People’s Bank of China sprung into action.

It was this announcement that helped speed up the development and push the drive to get this new national cryptocurrency out as the Chinese did not want to have to compete with Libra. In the country, much is controlled, including finance, and for Libra to take away some of that financial control would not work for the government. 

It now turns out that, according to officials, the national cryptocurrency for China draws a striking resemblance to what Facebook has planned with its own Libra cryptocurrency. So, the fear from the Chinese was not only because it was competition, but because they are also trying to do the same thing as the social media giant. 

Marching ahead

Already there is more information about the chinese cryptocurrency being released. There have been suggestions that some of the top banks and online retailers will have the first bite at the cherry in order to help distribute it. 

Mu Changchun — deputy director of the People’s Bank of China (PBoC)’s payments department — has said that China’s digital currency will be supported across major e-payments platforms such as Tencent’s WeChat and Alibaba-backed Alipay.

Mu has been reported as saying that the coin would help protect China’s foreign exchange sovereignty even as numerous commercial applications of digital currencies gain traction, clearly in reference to Libra.

“Why is the central bank still doing such a digital currency today when electronic payment methods are so developed? It is to protect our monetary sovereignty and legal currency status. We need to plan ahead for a rainy day,” he said.

This new token is also said to be able to be used offline, and they will be guaranteed by the central bank and thus as secure as any normal bank-offered paper note.

A November launch

With Libra announcing its plans to be launched in 2020; although that may have stalled due to the regulatory push back they have received, the PBoC have said that their coin could be ready for launch as early as November 11. 

It is even being suggested that the unveiling of Libra was one of the reasons that the coin was to be rolled out to the likes of Alibaba and others as they saw how Libra, which was fundamentally similar to this coin, was being used across Libra association members. 

Now, by allowing the coin to be pushed out through these non-governmental businesses, the PBoC has the advantage of getting their coin to the population of China more rapidly, and before Libra can even launch or potentially infiltrate the Chinese market, taking a lot of power and control away. 

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