China Says Facebook’s Libra Must Be Under Central Bank Oversight

China Says Facebook’s Libra Must Be Under Central Bank Oversight

Libra economic empowerment Facebook's Libra
Libra coin 3D render. Photo: BTC Keychain/Flickr/licensed under creative commons

Facebook’s planned cryptocurrency, Libra, could be put under China’s central bank oversight when it launches in 2020, a senior Chinese official told Bloomberg.

Facebook announced last month that it planned to issue a digital currency backed by high profile entities including Visa, Mastercard, PayPal and Uber. The California-based tech giant said it plans to raise about $1 billion for the effort.

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Mu Changchun, deputy director of the People’s Bank of China’s payments department, said Libra’s free flow across borders “won’t be sustainable without the support and supervision of central banks.”

“In the longer term, the yuan will be damaged by Libra if it’s not convertible,” he added.

China’s central bank, the People’s Bank of China, has been thinking about creating its own national digital currency to counter the possibilities and threats posed by the Facebook cryptocurrency.

Libra is seen as a savior for developing countries where financial inclusion is still low and a game-changer for the global remittances market.

It is, however, expected to weaken national currencies and risk the global financial system, according to Rep. Maxine Waters (D-CA), chairwoman of the House Financial Services Committee.

Regulators across Asia and Europe also hold the stance against the new cryptocurrency.