The local publication South China Morning Post reported yesterday the country's central bank is working on the development of its own digital coin to compete with Facebook's Libra, which could become a threat to China's financial system.
Wang Xin, director of the research office of the People's Bank of China (PBoC), is concerned about the fact that if the social network's crypto is massively used to make payments, mainly cross-border payments, it might eventually have an important impact in several fields, such as monetary policy and financial stability.
Moved by this concern, the central bank of the Asian giant has decided to develop its own digital currency, because if Libra, which is likely to be associated with the U.S. dollar in one way or another, ends up being successful, it will coexist with the countries' sovereign coins, which might hurt their financial stability.
In an attempt to deal with this situation, the PBoC has reportedly received approval from the Council of State to start working on a central bank digital coin (CBDC) together with other partners.
In January last year Ihodl Spain reported that China's central bank was considering the possibility of launching its own digital currency.
Even though the country is against standard cryptocurrencies such as bitcoin, it does support blockchain technology.
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