RBC Capital Market analysts have suggested that holding back Facebook Libra, might open up possibilities for China’s central bank digital currency to dominate globally.
China’s National Digital Currency Could Boost
Markets Insider reported on Oct 15. that the analysts of RBC presume that Facebook Libra stablecoin plans urged China to develop its own yuan backed digital currency.
RBC wrote to clients:
“If US regulators ultimately dismiss Libra and decide not to draft regulations to encourage crypto innovation in the US, China’s CBDC may be strategically positioned to become the de facto global digital currency in emerging economies.”
Regulatory Concerns For Libra
Steven Mnuchin, secretary of the United States Treasury said that firms have decided to drop Libra stablecoin because of regulatory concerns. He added that libra stablecoin is not at par with us regulations such as American Anti-Money Laundering standards.
“If they don’t meet the standards of our money-laundering standards and the standards that we have at FinCEN, we would take enforcement actions against them. I think they realized that they are not ready, they are not up to par and I assume some of the partners got concerned and dropped out until they meet those standards.”
The RBC analysts believe that many companies still have the interest to join Libra while those who left might make a comeback if the regulatory circumstances are right. The global investment bank added:
“If a clear regulatory roadmap is developed and Libra launches successfully, we would not be surprised to see these firms reapply to the association.”
Libra Facing Pullback From Companies
The US lawmakers pressured Stripe, Visa and Mastercard to rethink their membership of the Libra Association as a consequence of PayPal’s very public exit from the Libra project. On Oct. 8, three letters from two U.S. senators urged the tech and finance giants to “carefully consider” risks before moving forward.
On Oct. 12. cryptonewspoint reported that Mastercard, Visa, eBay – digital auction company, Stripe – payments firm and Mercado Pago have all pulled out of the Facebook-led Libra Association.
Source: Cointelegraph.com | Image: Wikimedia