Comment: China should have spare tire plan to deal with Libra shock wave

 Comment: China should have spare tire plan to deal with Libra shock wave

Wen/Yang Guoying

When discussing financial security, there is no doubt that Libras trend will be discussed. All this has to do with Facebook. Facebooks entry into the area of block chains has been unexpected. Whats more shocking is that Facebook has unprecedented released such an epoch-making new product of block chains and its white paper, claiming that Libras mission is to build a simple global monetary and financial infrastructure to serve billions of people.

Some people believe that Libra can become a digital currency beyond sovereignty, which will greatly improve the efficiency of global payment and liquidation, and thus subvert the existing monetary system. However, it has also been pointed out that Libra is not only difficult to overcome the regulatory barrier, but also not a currency in essence. It is a fantasy to challenge and even subvert the historical status of the French currency.

Such views collide back and forth many times, but no one can convince anyone. Meanwhile, Congress held hearings on Libras inquiries, but would they let Libra burn at home without any defense?

A closer look at the details of the hearing reveals that the U.S. government and lawmakers are hiding behind a slightly hostile attitude towards Libra. They are more discussing whether Facebook is suitable to play the role of publisher. How does Libra define its financial attributes? Should Libra wear the Feds hoop if she was born? At the hearing, few people directly opposed the emergence of this new species.

The inquiry we see on the big screen is probably just a reprieve by the U.S. government, intended to divert attention from other countries. As a result, the controversy is likely to remain on paper, and Libras release may not be hindered.

Whether its Facebook today or not, this change has come, and block chain technology is real, and its not denied from the United States to the world. The emergence of Libra is just the beginning of the post-Bitcoin era supported by French currency.

The U.S. government expresses various doubts and worries about Libra, but secretly may release it. Who can guarantee that the emergence of Libra will not take the lead in sweeping the world with the posture of super sovereign currency, penetrating the global payment system, so as to make capital flow back to the United States more smoothly? Marcus, the head of Libra project, has admitted that Libra, as an encrypted currency of block chain, has half of its reserve in US dollars. This sincerity which abandons the core elements of the decentralization of block chain can help the US dollar to gain new hegemony.

What does this mean for China and other countries? If Libra really landed, not only would the existing international financial order be disrupted, but also the internationalization of the RMB would be further hindered. This is obviously something we dont want to see.

Zhou Xiaochuan, president of the China Finance Association and former president of the Peoples Bank of China, believes that the emergence of Libra may represent a trend of global monetary integration. In the process of convergence and integration of RMB, domestic and foreign currencies, we need to consider the pressure of this trend on us. The Peoples Bank of China is also promoting the research and development of digital currency. For China, which is striving to expand financial openness and pursue the internationalization of RMB, it is very necessary to guard against possible disasters. After all, the future currency war is likely to explode in some unexpected form.

Facing the Libra shock wave, China should have its own spare tire plan. The emergence of Libra has already declared that the super sovereign currency is approaching, which obviously constitutes a super inequality for the RMB. It is urgent to cultivate our own digital currency as soon as possible.

The promotion of the digital currency spare tire plan requires the regulatory authorities to review the situation and carefully lay out the plan. In addition to actively co-ordinating the R&D power of state-owned finance, we should integrate as soon as possible the strength of the technological and financial platform with strong capabilities for traditional finance, so that they can participate in the R&D, management and circulation of digital currency as soon as possible, and share the responsibility of financial security.

We believe that with the popularity of digital economy, especially digital payment, as well as the accumulated and tested technology thickness of large-scale technology and financial platforms over the years, we are fully capable of creating a Chinese version of digital currency spare tire as soon as possible, in order to prevent a possible Libra shock wave.

Source: Beijing Youth Daily Responsible Editor: Qiao Junjing_NBJ11279