Facebook’s Libra Spurs Chinese Innovation

Author: Dylan B
Date: 
September 09, 2019
Read time: 
2 minutes

While Facebook’s Libra intended launch may have been brought to a halt as a result of the regulatory backlash, the projects that have stemmed directly from Facebook’s announcement have been just as exciting in their own right. One such project that has just been brought to light is a new digital currency being developed by the Chinese government.

While Facebook’s Libra intended launch may have been brought to a halt as a result of the regulatory backlash, the projects that have stemmed directly from Facebook’s announcement have been just as exciting in their own right. One such project that has just been brought to light is a new digital currency being developed by the Chinese government.

Many believe that these developments are a direct result of Libra’s intended release. According to Mu, the central reason for creating this digital yuan is to protect monetary sovereignty and to strengthen and protect the Chinese yuan. 

Changchun Mu, who was previously the deputy director of the payments and settlement division for the People’s Bank of China, is now spearheading the Digital Currency Research Institute’s project for a digital currency and payment tool that functions in a similar way to the traditional yuan, only in an electronic form. His most recent report describes this digital currency as being similar to the Libra project but with improved functionality. 

Still functioning as a traditional cryptocurrency, the digital yuan will also allow users to make transfers without the need for an account or internet connectivity. As long as both users have a wallet for the currency, they will be able to transfer money between them by simply touching their phones together, a feature that, Mu has made clear, can’t be found in Libra. 

Much like other digital currencies, there will not be a need to have a bank account to access or use the digital yuan, which will help to promote freedom and privacy when using this new system in lieu of the traditional Chinese banking system. That said, the currency itself will be distributed through commercial banks like physical yuan. The banks will have to open accounts with the People’s Bank of China and purchase the token at 100 percent value, after which interested users can then visit these banks to open wallets of their own for the digital currency.

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Many believe that these developments are a direct result of Libra’s intended release. According to Mu, the central reason for creating this digital yuan is to protect monetary sovereignty and to strengthen and protect the Chinese yuan. 

Some reports state that we should see the release of this currency within the next few months and banks that are said to be involved with the initial release include Alibaba, Agricultural Bank, China Construction Bank, Tencent, Bank of China, and UnionPay. It has also been rumored that the digital currency will be available major payment platforms like Alipay and WeChat. 

You can view the full original report here on Shanghai Securities News.

Posted by Dylan B

Dylan Buckley is a writer based in California. He became interested in cryptocurrency upon discovering it in 2014 and soon started investing as well as writing for a wide variety of clients and crypto-startups in the space. When he is not producing content for individuals and businesses, he is typically working on his own self-development content or making music.

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