PBOC and Huawei Support The Creation of the Chinese Libra To Compete Against Facebook

The founder of Huawei Ren Zhengfei said that China could be able to create its cryptocurrency rather than wait for Facebook to do so. This is according to a tweet that cnLedger uploaded on July 26. Huawei is a multinational Chinese company that focuses on producing smartphones and other technological equipment.

PBOC Could Create a Cryptocurrency

The PBOC is also known as the People’s Bank of China, the central bank of China that is in charge of the monetary policy of the Asian country. Facebook, the largest social media network in the world, announced the creation of its cryptocurrency called Libra on June 18.

There are many regulatory agencies, companies and analysts talking about it and which is going to be the impact on the economy and other currencies around the world. In China, local media has also been comparing it with new local options that could be created through digital payment systems operating in the country. Companies that could eventually have their plans to launch a digital asset include WeChat Pay, QQ Coin and Alipay.

However, China has not adopted virtual currencies, indeed, Bitcoin (BTC) can’t be exchanged in the country, and other virtual currencies are also not allowed. Facebook is also banned in China as well as Instagram, which means that Libra’s digital asset would not have the possibility to operate in the Chinese market.

In addition to it, some reports suggested that China could ban crypto mining activities. The country hosts around 70% of all the crypto mining activities around the world, which is very important for the whole crypto space. Furthermore, China banned Initial Coin Offerings (ICOs) in September 2017.

The former People’s Bank of China Governor Zhou Xiaochuan explained that Libra could pose a threat to the current cross-border payments systems and could weaken national currencies around the world.

On the matter, he commented:

“Libra has introduced a concept that will impact the traditional cross-border business and payment system. In the face of this new risk, even if not a major one for China, the government should make good preparations and make the Chinese yuan a stronger currency.”

In addition to it, Chen Dafei, a senior analyst at Orient Securities, said that major tech companies such as Alibaba or Tencent could eventually work with the PBOC on a national virtual currency.