China's central bank is creating a cryptocurrency to challenge Libra

China's central bank is creating a cryptocurrency to challenge Libra

China's central bank is creating a cryptocurrency to challenge Libra

Wang confimed that the PBoC had been working with market institutions on developing its central bank digital currency, according to the report.

The South China Morning Post reported Wang's comments today, who said the PBOC is paying "high attention" since the release of the Libra white paper last month.

Wang indicated China needed to know precisely which currencies those would be, and whether the US dollar would play a role, according to the Post.

Also, Libra will be backed by several fiat currencies with the USA dollar at the core.

"If the digital currency is closely associated with the United States dollar, it could create a scenario under which sovereign currencies would coexist with usa dollar-centric digital currencies".

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The Monetary Authority of Singapore (MAS) remained in talks with Facebook about the U.S. social media platform's plans for Libra and would consider "appropriate regulatory responses" once specifics about the cryptocurrency were provided, said Senior Minister Tharman Shanmugaratnam, who oversees the central bank.

In terms of Libra, Wang said he takes issue with the crypto's close correlation to the US dollar. "If so, it would bring a series of economic, financial and even worldwide political consequences".

He noted that Facebook had expressed hopes its new digital currency would help lower the cost of payments and bring the unbanked into the financial system. However, this is not the bank's first foray into crypto research.

Academics have also reportedly launched a committed initiative on digital finance which includes resources from Peking University, Renmin University, Zhejiang University and Shanghai Jiao Tong University. On the other hand, Libra has aroused some serious concerns from governments, case in point, USA government regulators asking Facebook to halt development of Libra. This gives the U.S. the upper hand and China knows this and hence the reason why plans to develop its own digital currency are underway.

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