China’s central bank is creating its own cryptocurrency in response to Facebook’s Libra. Wang Xin, Director of the People’s Bank of China Research(PBoC) Bureau made the announcement. The bank is worried that Libra could potentially pose a challenge to Chinese monetary policy and financial stability.
Considering Facebook is beholden to pressure from U.S. policymakers, it is in China’s interest to ensure Libra does not take hold in the country. Wang confirmed that the PBoC had been working with market institutions on developing its central bank digital currency. The digital currency will be similar to Facebook’s Libra. It will help China’s central bank maintain control over its economy.
China’s stance towards Bitcoin, and cryptocurrency, in general, has been hostile—and understandably so. The country’s financial institutions had previously banned bitcoin trading, initial coin offerings, and crypto exchanges.