In the event of Securities and Exchange Commission (SEC) still not convinced about allowing the cryptocurrency-based exchange-traded fund (ETF) from featuring on a major U.S. exchange; Facebook had to face numerous regulatory issues on its way to launch its cryptocurrency project, Libra; China is mulling about options to launch its own international cryptocurrency.
According to a report by CNBC, the world’s second-largest economy
announced earlier this year that it was working on a digital currency backed by the yuan, reportedly inspired by Facebook’s announcement. Analysts and crypto industry leaders are highlighting geopolitical implications of China launching a digital currency first — especially if libra hits a brick wall with U.S. regulators.
Whereas CEO of Ripple, Brad Garlinghouse feels that
China has been incredibly strategic about how they think about cryptocurrency; they have been dependent on the U.S. dollar as the global reserve currency — to the extent that other currencies emerge, and they can help propagate those, they’re intrigued by that.
China has been very open about the idea of digital currency as regards America, which has shown a rather reserved approach. Industry experts are of the opinion that if U.S. regulators dismiss Libra and decide on not providing an environment conducive for “crypto innovation” then, China’s digital money would have undisputed dominance in the crypto-market. Its reach would be largely aided by Alipay, WeChat, UnionPay, and other messaging and payment apps.
At the recent US-China trade talks, which is about to conclude, both the nations are expected to reach a consensus regarding export tariff and Chinese standardization of subsidies. As of now, both countries have come to a mutual agreement on primary Currency Exchange rates.