Facebook Libra: What can China learn from the world’s first super sovereign currency?
- China has previously voiced support for a super sovereign currency to replace the US dollar hegemony, but could Facebook’s Libra steal its thunder?
- Facebook is banned in China, but its new digital currency could also provide a benchmark for China in creating its own version
Facebook’s plan to launch a new digital currency, Libra, has triggered a debate in China as to whether Beijing should welcome, worry about or simply ignore the launch.
On one hand, there are concerns that Libra could bring fresh uncertainty to Beijing’s vision of a future move away from the US dollar hegemony, and also pose new risks to China’s capital controls.
On the other hand, Libra could offer fresh incentives for China to accelerate the creation of its own digital currencies and provide a benchmark against which Beijing can view how other countries regulate them, analysts in China said.
The People’s Bank of China (PBOC) has yet to make any official comment on Libra, while Facebook remains banned by China’s internet censors.
Libra, which could be launched in the first half of next year, regulatory approval permitting, has the potential to tap into the social network’s 2 billion-plus users, who would theoretically be able to use it to save and transfer money, and buy goods and services.
