Facebook and China are to confront one another in pioneering the most critical cryptocurrency project. China is reportedly expediting its operations in developing its own cryptocurrency backed by Yuan.
In a recent interview in Beijing, RBC informed the customers that China “has expedited its development of a Central Bank Digital Currency” after the announcement of Libra by Facebook in June.
The industry administrators are indicating the political aftermath of China inaugurating its project before Facebook does, as Facebook seems to have been facing chill winds with the regulators.
Facebook’s plans for Libra also seem uncertain now after some prominent members have retreated their support.
Brad Garlinghouse, CEO of Ripple, said in an interview,
“China has been incredibly strategic about how they think about cryptocurrency. They have been dependent on the U.S. dollar as the global reserve currency — to the extent that other currencies emerge, and they can help propagate those; they’re intrigued by that.”
China’s digital currency project is reportedly much akin to Facebook’s Libra, according to a report published online. It was also informed that the currency would be utilized over some prime payment platforms, including WeChat, as well as Alipay by China.
RBC analysts said in a report that,
“If U.S. regulators ultimately dismiss Libra and decide not to draft regulations to encourage Crypto innovation in the U.S., China’s [Central Bank Digital Currency] may be strategically positioned to become the de facto global digital currency in emerging economies, largely through Alipay, WeChat, UnionPay, and other messaging & payment apps.”
The senior analyst, Lisa Ellis, at MoffettNathanson, spoke that regulators might be distracted by Facebook’s operations for Libra and hence need to concentrate on the relative measures.
“If governments and regulators are concerned about their control over monetary systems and money flows, the best defense is a good offense. It would behoove regulators in the U.S. and Europe over the long term to maintain their leadership given that the dollar, the euro and the yen are used as proxies for global reserve currencies.”
It is believed that this recent development if succeeds, can add to the diplomatic pressure between the economic powers of the world. U.S. and China reportedly are already embroiled in a competitive phase in 5G technology. TheTreasury Department of the U.S. has tagged China as a currency manipulator. This could act as fuel if the Chinese cryptocurrency hits the roof.
Garlinghouse from Ripple had been suspicious of Libra. This is a little due to the formative regulatory protocol. He feels that if cryptocurrency initiatives don’t prosper and cause problems across the U.S., there could be probable geopolitical indications.
It is thought that Facebook’s transition into payments will be performed via Whatsapp because the messenger acquired by Facebook doesn’t completely include a built-in payment feature. WhatsApp has still accomplished a pilot feature of payments.
Whatever the circumstances are, cryptocurrency is going to emerge as the sole winner.