Former PBOC Official: China should be ready to counter Facebook's Libra project

Former head of the People's Bank of China, Zhou Xiaochuan, mentioned that China should reconsider its national digital currency plan in response to the potential threats posed by Facebook's Libra cryptocurrency project, in order to protect the country's interests.

According to a report, at a recent event in Beijing, former governor of the People's Bank of China, Zhou Xiaochuan, mentioned that Facebook has demonstrated with its Libra product that it will create a "strong" global cryptocurrency that is expected to be exchangeable for fiat currency.

While Libra may help China improve its existing payment system in development, it also poses a threat to current cross-border payment systems and could potentially weaken the country's currency.

He stated:

Libra will significantly impact traditional cross-border businesses and payment systems. Even though the largest risk for China does not lie in Libra at present, the government should be prepared to make the renminbi a stronger currency.

Chen Dafei, senior analyst at Orient Securities, suggested that comments like these imply that companies with large payment networks like Alibaba and Tencent may participate in issuing national digital currencies, similar to stablecoins pegged to the USD and regulated by the government, such as GUSD.

During his tenure at the People's Bank of China, Zhou Zhou strongly supported the development of a digital currency for China and once said its issuance is inevitable.

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