Facebook’s digital currency Libra poses a threat to WeChat Pay and Alipay, says Tencent whitepaper

Chinese tech giant Tencent Holdings has acknowledged that Facebook’s proposed cryptocurrency Libra could pose a serious threat to existing digital payment systems, including its own WeChat Pay as well as Alipay from rival Alibaba Group Holding.

“Libra, if launched successfully … would not only impact traditional financial institutions but also undermine internet firms, including Tencent and Alibaba, which have their own relatively mature payment systems, hindering their global expansion,” Tencent said in a blockchain whitepaper released this week.

Facebook unveiled its Libra cryptocurrency in June, aiming to peg it to a basket of currencies backed by reserves, subject to regulatory approval. Facebook has 2.7 billion users on its social media platform as well as the backing of global payment, technology, telecommunication, blockchain and venture capital firms for the plan.

The potential global user base for Libra and wide-ranging services offered by its backers would affect the global expansion of digital payment companies who are not part of the Libra club, the white paper states.

Tencent operates China’s dominant social media and do-everything app WeChat with over 1 billion daily active users, and its WeChat Pay is one of the biggest digital payment services alongside Alibaba’s Alipay.

Alibaba is the parent company of the South China Morning Post.