David Marcus, the top Executive of Facebook on the Libra project, said that China will create a digital currency system that could be entirely out of reach for U.S. authorities.
According to an interview with Bloomberg News, Marcus warned that Washington risks “having a whole part of the world completely blocked from U.S. sanctions and protected from U.S. sanctions and having a new digital reserve currency.”
“The future in five years, if we don’t have a good answer, is basically China re-wiring” a large part of the world “with a digital renminbi running on their controlled blockchain.”David Marcus
China has been stepping up its efforts to push forward with its Digital Currency Electronic Payment (DCEP) since Facebook unveiled its Libra project in June.
However, Chinese Central Bank officials have emphasized that one of the goals for China’s cryptocurrency is to acquire the rise of Libra that would reinforce the dollar dominance in the international financial system.
While Libra would be grouped to a basket of fiat currencies, excluding China’s renminbi (currency), one of the five reserved fiat currencies is accepted by the International Monetary Fund (IMF) for international transactions.
China’s DCEP had been in the works, but the project’s development accelerated after Libra was announced.
Likewise, the People’s Bank of China (PBoC) appointed Mu Changchun to lead the Research Institute on Digital Currency in September and detailed a proposal to launch and distribute the national coin among major Chinese commercial banks.
Facebook’s crypto initiative has met with resistance from the U.S. Senate and the Federal Reserve since it was announced in June.
Thus, five major partners, including PayPal, MasterCard, and Visa, withdrew their support this month due to the business and regulatory challenges.
Source: bloomberg.com | coindesk.com
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