Facebook’s plan of launching a new cryptocurrency by the name of “Libra” has been getting mixed reviews from the governments, regulatory bodies, financial experts, and consumers. While a few see it as a threat to the current financial system, others have highlighted its potential as a tool that can emancipate the world from the cruelty of governments and banks.
China Is Focusing On Building Its Own E-Currency
Mr. Mu Changchun, a prominent official from the Chinese Central Bank, has recently highlighted that in an event that Facebook’s Libra manages to receive wide-scale adoption, it will only be a matter of time that it sidelines the traditional financial system and builds a reputation as a super-sovereign currency throughout the world. In order to maintain the monetary sovereignty of China, therefore, it is the need of the hour to work on digitalizing China’s own currency system.
As of June 2019, China has already expressed its plan of digitalizing its currency. As per the financial experts, the details that have been publicized so far highlight that China’s idea of e-currency is very different from the likes of Bitcoin. Once the state starts to issue e-currency within the country, the government and relevant authorities will be able to get a detailed insight into the spending habits of the population. While the privacy concerns are yet to be resolved, the realization of such a plan will assist the government in its battle against crime while streamlining the management of the economy at large.
Mr. Martin Chorzempa of Washington’s Peterson Institute for International Economics has stated that digitalizing the financial system provides an insight that is nothing short of an extraordinary power that none of the central banks currently have.
Canada, Singapore, And The UK Have Also Experimented With Digital Tokens
While China is known for banning the likes of Facebook and Google services, it has never failed to offer its people an alternative. Joining the league of Canada, Singapore, and the UK; the countries which already have their central banks experimenting with the idea of a national virtual currency, China intends to continue its legacy and digitize its own financial system for the people.
Earlier this year, an official statement from the European Central Bank labeled Facebook’s Libra as a “wake up call” for the banks from all over the world to speed up their efforts in the realm of electronic payments. The recent development depicts that China has taken it seriously and intends to be the pioneer of digitizing its financial system.