China’s stance on cryptocurrencies and digital assets seemingly hasn’t changed much. However, when it comes to handling Facebook’s Libra, battle lines may be drawn fairly soon.
More specifically, the central bank is closely monitoring this situation.
China Might Regulate the Libra After all
A PBoC deputy governor wants China to collaborate with other countries on regulating this specific digital currency.
This is in stark contrast to the previous approach by the Chinese government.
At one time, it seemed as if the country would build its own alternative medium of exchange.
Those plans are still on the table, albeit a Chinese CBDC may not necessarily be the answer to this “problem”.
Given how the Libra will not include the Yuan in its reserve basket, it poses a significant threat.
After all, Facebook’s Libra can boost the dominance of the US Dollar even further.
Rather than taking this aggressive approach, actively regulating the currency may be a better plan of action.
Whether these comments will be acknowledged, remains uncertain.
A CBDC research scheme is still an option to explore, even though it has no official schedule attributed to it.
Other governments seem less open-minded tot he Libra altogether.
France, for example, maintains its vision of trying to ban this digital currency altogether.
It will be interesting to see how other regions respond to the Libra.