China’s National Crypto Similar to Libra, Central Bank Official Says

A top official at China’s central bank has confirmed that the country’s forthcoming digital currency will bear similarities to Facebook’s Libra token.

The English-language website of the Hong Kong Economic Journal reported the news on Sept. 6, citing prior coverage by Shanghai Securities News, which is owned by the official Chinese state-run Xinhua News Agency.

“We need to plan ahead for a rainy day”

Mu Changchun — deputy director of the People’s Bank of China (PBoC)’s payments department — has said that China’s digital currency will be supported across major e-payments platforms such as Tencent’s WeChat and Alibaba-backed Alipay.

The tokens will be guaranteed by the central bank and thus as secure as PBoC-issued paper notes and can be used without an internet connection, to ensure that transactions can continue even in the event that communications networks are down. 

Speaking of the country’s motivations to pursue a digital currency, Mu argued that the coin would help protect China’s foreign exchange sovereignty even as numerous commercial applications of digital currencies gain traction:

“Why is the central bank still doing such a digital currency today when electronic payment methods are so developed? It is to protect our monetary sovereignty and legal currency status. We need to plan ahead for a rainy day.”

The forthcoming national digital currency will aim to offer provisions for anonymous payments while preventing money laundering, Mu noted. He clarified that while the payments-focused currency would bear similarities to Libra, it would not be a direct copy.

Could launch as soon as November

As reported, China has been researching its digital currency project since 2014, with development work gathering speed in 2018. Last month, the PBoC revealed the currency was almost ready to launch. 

As the Hong Kong Economic Journal notes, the currency could launch as early as Nov. 11 — significantly sooner than Facebook’s Libra.

Mu has previously indicated that the currency’s organizational structure is to some extent similar to that of Libra’s and that the social media titan’s project had influenced the currency’s original design.

Chinese academics have also claimed that the unveiling of Libra had sparked debate among local regulators and motivated the project’s designers to involve more non-governmental institutions in the currency’s development and issuance process.

Even as Libra faces significant regulatory hurdles — perhaps jeopardizing its prospective launch — executives at Apple’s payments service, Apple Pay, have this week signalled that Apple considers that a move into crypto could make strategic sense and that the firm believes that cryptocurrency has long-term potential.