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China says new digital currency will be similar to Facebook’s Libra

The new digital currency suggested by China would be similar to the Libra coin of Facebook, and could be used across critical transaction systems like WeChat and Alipay, a leading central bank representative said.

Mu Changchun, vice director of the department of transactions of the People’s Bank of China, said that coin creation would assist safeguard foreign exchange sovereignty in the country as a business implementation of these currencies increased.

“Why does the main treasury still make such a digital exchange today when electronic billing techniques are created so?” Mu said in a speech that was released internet this week.

“We have to prepare for a snowy day,” he said the tokens would be as secure as the document bill issued by the central bank and could be used even without an Internet connection. They can also be used with WeChat from Tencent and Alibaba-backed Alipay.

In 2014, the main Chinese treasury put up a study group to examine the launch of its electronic monetary to reduce the cost of distributing traditional electronic cash and increase the command of cash production by politicians.

It’s said little since, but Mu announced last month that the digital currency is nearly ready. US financial magazine Forbes, citing sources, said that as soon as 11 November, the money could be available.

Some experts believe China has speeded up digital money after the US social media company Facebook announced intentions to introduce Libra’s digital coin in June.

Mu said China’s digital currency would strike a balance between anonymous payments and money laundering prevention. It would also have certain similarities with Libra in design, but would not be a direct copy.

The suggested Facebook cryptocurrency has provided rise to worries among worldwide authorities that the social network can rapidly become a dominant type of digital deposit and outlet for money laundering.

Libra will be a digital currency, which will be kept in a network of custodians, supported by a stock of actual resources, including bank deposits and short-term government securities. Its system is designed to promote confidence and cost stability.

Like other cryptocurrencies, Libra transactions are powered and recorded via a blockchain, a shared directory of transactions held by a computer network.

Mu noted that the benefit of an electronic currency published by the central bank over WeChat and Alipay is that business systems may, in principle, become idle, leading to user loses.

Its capacity to proceed operations without an internet connection would also be able in circumstances where relationships, such as an earthquake, have collapsed.

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