(BlockBar) The south China morning post reported on Monday that China’s central bank is considering developing an officially cryptocurrency for the first time since it banned virtual currencies two years ago. For them, there is no better social medium than WeChat to meet their requirements. For WeChat is a social media platform owned by Tencent, which is function as a basic social software and a digital payment system.
It’s concerned that Facebook’s Libra could challenge China’s cross-border payments. Furthermore, the monetary policy and financial sovereignty will be affect.
“If Libra becomes global coin, Can it work like real money and have a major impact on monetary policy, financial stability and the international monetary system?” Wang Xin, director of research at the people’s bank of China, asked at a conference at Peking University’s digital finance research center.
China’s central bank appeared to communicate with WeChat developers in May, that plan to mimic Facebook’s Libra project to release an affical digital currency. Worldwide, WeChat has 1.1 billion monthly active users. Social media companies also tend to use WeChat because the active users highly dominate their lives on the platform. Tencent’s WeChat payment service, launched in 2013, has more than 900 million users. WeChat payments are based on the trajectory of the Chinese banking system. What’s more, the transactions based on Weixin are in Renminbi. This is also a drawback for Weixin to break the cross-border payments.
Stable currency can break through the “boundary” of legal tender exchange and gradually form an innovative, cashless value model, a stable currency. The stable currency, linked to legal tender, is a valuable bridge between cryptocurrency and the real world of legal tender. Although the stable currency is also limited to recharge and settle legal bills, it is bound to become a safe method for investors in the future, a means of payment for bulk transactions, and one of the most important USES — cross-border payment.
China, meanwhile, seems to be reforming its research on how to regulate state-sanctioned cryptocurrencies, so that it will respond when Libra launches.
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