Magazine - China wants to preempt Facebook with its own digital currency


Magazine - China wants to preempt Facebook with its own digital currency

AtlantisFX | Beijing / Berlin, Aug. 28 (Reuters) - According to a press release, China plans to launch a digital currency in the fall this year, thereby cutting out Facebook FB.O. The US financial magazine "Forbes" reported, citing two persons familiar with the matter, it is scheduled for 11 November: the so-called Single's Day - the world's largest online bargain tag. The central bank in Beijing has been working on setting up its own digital currency since 2014. Earlier this month, the vice director responsible for payments had said that it was "almost done".


The push to build up its own cryptocurrency in the country with its billion-dollar population falls into a time in which the American Internet group Facebook is also driving forward its own plans for its crypto-gadget Libra: It should be launched in the first half of 2020. However, the project has met with skepticism among financial regulators worldwide.


"China wanted to forestall Facebook, but it is surprising that it seems to be happening so fast, the cryptocurrency already live on November 11," said expert Kai von Carnap of the Mercator Institute for China Studies (Metrics) on Wednesday. "We do not know much about the technical structure yet, but it seems that the Chinese cryptocurrency is one or two steps ahead of the Libra coin, which is still on very shaky ground." China's currency watchers are likely to try to tackle the international market with the digital yuan: "The new Silk Road Initiative will try to convince third countries to use it."


AMAZON-RIVALE ALIBABA AT THE START


According to the Forbes report, the central bank PBOC has initially selected seven institutions for the distribution of the new digital money, including the Chinese Amazon rival AMZNO.O Alibaba (NYSE: BABA) BABA.N, as well as the also domestic Internet giant Tencent 0700.HK. In addition, the credit card organization China UnionPay and four state banks to bring the new cryptocurrency under the people. Confirmation was not available for the time being from the starter circle mentioned in the report.


While China is now on the final stretch with its plans for its own digital money, Facebook is still struggling with start-up difficulties. EU competition authorities are investigating possible problems with Libra, according to media reports. There was, therefore, a concern that these competitors would be locked out in an inadmissible way. In addition, possible integration of Libra with the services of the US group such as WhatsApp and Messenger analyzed. Just because of the potential number of users - about 2.4 billion people are registered on Facebook - Libra should play an important role in the international monetary system. However, from the plans of the private company Facebook, the British central bank chief Mark Carney has recently proposed the construction of a new, supranational reserve currency. He laments a destabilizing role of the dollar for the world economy. Many states are therefore exposed to the upheavals of the US economy. The best way to replace the dollar is, according to Carney, a common, virtual, multi-polar reserve currency. A "network of central bank currencies" could thus limit the dominance of the dollar in trading. (Other reporters: Yawen Chen, Cheng Leng, Kevon Yao, and Josh Horwitz, edited by Kerstin Dörr. If you have any questions, please contact the editorial office at 069-7565 1236 or 030-2888 5168.)

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