(BlockBar) The United States prohibits large technology companies from issuing coins. However, China’s attitudes and views towards digital currency remains positive.
Whether active or passive, traditional financial institutions and technology giants are entering the field of digital currency. In particular, the emergence of Facebook Libra has once again subverted people’s imagination of the world monetary and financial system. Digital money has become an inevitable trend in the future, and this trend is becoming more and more obvious.
For fear of privacy, money laundering and financial stability caused by Libra, Congress held a hearing to raise questions. Before the upcoming Libra hearing, Democrats on the House Financial Services Committee proposed a draft, Keep Big Tech Out of Finance Act, to prevent large technology companies having the functions of financial institutions from issuing digital goods or coins.
For the traditional giants who are eager to try, the proposal undoubtedly conveys a strong warning. But the bill does not necessarily get enough votes to pass, and even if it is passed by the House of Representatives, it still needs to be approved by the Senate. Nevertheless, the United States does have doubts about global digital currencies. In previous reports on Block Chain, President Trump commented that if Facebook and other companies want to become a bank, they must seek a new bank license and comply with all banking regulatory regulations at home and abroad, just like other banks.
Recently, Zhou Xiaochuan, former governor of the People’s Bank of China, pointed out that after the global financial crisis in 2008, one of the important reasons why China has been able to narrow the gap with the United States is that the financial system is relatively sound. However, the economic and financial crisis is still unavoidable. Only by conducting forward-looking research and preparing in advance, can we have a favorable position in the future international and global competition. Therefore, the study of digital currency and currency globalization in China should be carried out as soon as possible.
According to Zhou’s suggestion, China can learn from Hong Kong’s “Monetary Bureau” system of issuing Hong Kong dollars. Commercial institutions issue banknotes and require 100% guarantees for the issuers of digital currencies. It is worth mentioning that not long ago, Wang Xin, Director-General of the Central Bank Research Bureau, also disclosed that, “If our institutions have a very good foundation and conditions, we can also issue a Chinese version of digital currency similar to Libra.” When the Libra plan was launched, the CEO of Tencent commented that technology was mature and not difficult. Whether it will succeed or not depends on whether regulation was allowed. From the recent signals released by the central bank, a chance for Chinese Internet companies such as Tencent and Alibaba to overtake in the digital money world may come.
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