Central Bank of China Development of own digital currency in response to Libra

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China's central bank is said to develop its own digital currency in response to Facebook's Libra, as it is said to pose a risk to the country's financial system, the South China Morning Post reported on July 8.

Wang Xin, director of the People & # 39; s Bank of China (PBoC) research agency, stated that "if (Libra) is widely used for payments, especially cross-border payments, it could function as money and therefore have a major impact about monetary policy, financial stability and the international monetary system? "

Wang said the bank decided to create its own digital currency, particularly due to the unclear role of the US dollar once Libra was issued:

"If the digital currency is closely related to the US dollar, it can create a scenario where sovereign currencies can coexist with US dollar centric digital currencies. But there would be essentially one boss, the US dollar and the United States. If so, this would entail a series of economic, financial and even international political consequences. "

As such, PBoC is said to have received approval from the Chinese central government, the Council of State, to work with other market participants and institutions in a digital currency from the central bank.

Academics have also reportedly launched a dedicated digital finance initiative, with funds from the University of Beijing, Renmin University, Zhejiang University and Shanghai Jiao Tong University.

In particular, PBoC's plans to develop a national digital currency come at a time when China has chosen a hard line in the direction of cryptocurrency trading, where financial institutions trade Bitcoin (BTC), initial currency offers and cryptocurrency. prohibit exchanges.

As previously reported, the PBoC blockchain trade finance solution has processed more than 30 billion yen ($ 4.36 billion) in currency transactions since its inception.

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Don Bradman

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