Facebook and China on Developing Global Digital Currencies in Emerging Markets

Reportedly inspired by Facebook's announcement to head the launch of a crypto-currency run by the non-profit Switzerland-based Libra Association in 2020, the Peoples' Bank of China reported recently that it was working with a digital currency upheld by the Yuan.

This proposed digital currency by China is said to bear a few similitudes to Facebook's Libra, which is what has shaken Facebook’s cryptocurrency plans.

Analysts and crypto industry pioneers are highlighting geopolitical ramifications of China propelling a digital currency first — particularly if Libra hits a 'brick wall' with U.S. controllers. The Chinese digital coin could be utilized across significant payment platforms, including China's omnipresent WeChat and Alipay. The Peoples' Bank of China "has expedited its development of a Central Bank Digital Currency” after Libra's announcement in June, state the RBC Capital Market analysts.

RBC analysts Mark Mahaney and Zachary Schwartzman said in a research note “If U.S. regulators ultimately dismiss Libra and decide not to draft regulation to encourage Crypto innovation in the U.S., China’s [Central Bank Digital Currency] may be strategically positioned to become the de facto global digital currency in emerging economies, largely through Alipay, WeChat, UnionPay, and other messaging & payment apps,”

The U.S. Treasury Department has thusly labeled China as a currency manipulator — a complaint that could be exacerbated if a Yuan-supported cryptocurrency takes off.

Now that the U.S. and China are locked in an impasse on trade, and a battle for predominance in 5G, the mobile network promising faster data speeds, the cryptocurrency would add to a long list of existing pressures between these global superpowers.

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