Friday 6 September 2019 8:49 am

China’s new digital currency will be similar to Facebook’s Libra, officials say

China’s proposed new digital currency would be similar to Facebook’s Libra and be able to used across major payment platforms, a senior official from Beijing’s central bank has said.

“Why is the central bank still doing such a digital currency today when electronic payment methods are so developed?” said Mu Changchun, deputy director of the People’s Bank of China’s payments department.

Read more: Privacy regulators ‘concerned’ by Facebook’s Libra cryptocurrency

According to a transcript of a lecture he gave this week, Mu said developing the coin would help protect China’s foreign exchange sovereignty. “It is to protect our monetary sovereignty and legal currency status. We need to plan ahead for a rainy day,” he continued.

The coins would be as safe as paper notes and could be used on Tencent’s WeChat and Alibaba’s Alipay platforms, Mu said.

It will also be possible to use it without internet, which Mu said would allow transfers to continue in scenarios where communication channels have broken down, such as an earthquake.

It would bear some similarities to Facebook’s planned currency, Libra, but would not be a direct copy, he said. Facebook announced plans to launch Libra in June, but regulators have raised concerns that the coin could become a channel for money laundering.

Libra will be a digital currency backed by a reserve of real-world assets, such as bank deposits and government securities, held by a network of custodians.

Read more: Facebook’s libra cryptocurrency could undermine European Central Bank

China’s central bank established a team to explore launching its own digital currency in 2014, in an attempt to cut the cost of circulating paper money and increase governmental control over the money supply.

Mu said last month that the currency was almost ready. Forbes has reported that the coin could launch as soon as 11 November.

Main image credit: Facebook