Nobody is further ahead in mobile payments than China. The country has 583 million users of mobile payments, or 71.4% of all mobile internet users in the country. Paying with cash has practically become a faux pas.
This is why many people in China are not impressed by Facebook’s new cryptocurrency Libra, saying that similar products have long existed in China.
The new digital coin is built on blockchain, which can supposedly make it easier and cheaper for users to move money across different countries. Different from volatile cryptocurrencies like Bitcoin, Libra is meant to be what’s called a “stablecoin,” which in this case means it will be backed by a basket of major currencies and securities to minimize price volatility.
“Isn’t this the Facebook version of QQ coin?” asked one Weibo user, whose comment drew hundreds of likes. The user is referring to digital money created by Tencent in 2002, which retails at one yuan (US$0.14) per coin. It lets users shop for virtual products that can be used in Tencent games and services, and sometimes real products. Users can also transfer QQ coins to each other.
“Congratulations to the US for entering the era of QQ coin/WeChat/Alipay,” another person said on Q&A site Zhihu in a post that received 300 upvotes.
Some online commenters pointed out the many differences between QQ coin and Libra, such as the fact that Libra will be built on blockchain. But while the underlying technology may be different, others couldn’t help but notice similarities between Facebook’s new digital coin and China’s biggest digital payment products, WeChat Pay and Alipay.
(Abacus is a unit of the South China Morning Post, which is owned by Alibaba, whose affiliate Ant Financial operates Alipay.)
Fintech research company Wisburg recently posted that Libra is structurally more similar to financial products such as Yu’e Bao, a money market fund distributed by Alipay.
But experts and prominent tech industry figures, including one executive of a Chinese tech giant, seem to think that it will have groundbreaking implications that will pose challenges to China.
“The internet 3.0 is here,” said Wang Xiaochuan, founder and CEO of Chinese search engine Sogou. “The world will change because of this, and it’s a new challenge for China.”
Some online commenters seemed to agree that it could challenge China’s ambitions for its own currency, the renminbi. Some said the Libra will be a tool for the US dollar to continue its dominance and that it will hurt the internationalization of China’s own currency.
“In this new ecology, our mobile payments and the internationalization of the renminbi lack imagination,” Wang added in another Weibo post, saying that the Libra plan is not decentralized. “If you can’t revolutionize yourself, you will be revolutionized by others.”
One big question facing Libra is whether Facebook will get the support of financial regulators around the world. It’s something Tencent CEO Pony Ma wondered about, as well.
“The technologies are all very mature, it’s not hard,” Ma said in a WeChat screenshot reported by Chinese media. “It all depends on whether regulators will allow it.”