Bitcoin near two-week highs, fueled by hopes for Facebook's Libra

Andrew Cummings
July 10, 2019

A big-scale cryptocurrency plan like Libra could, however, exert huge impact on existing digital currencies like Bitcoin.

He noted that Facebook had expressed hopes its new digital currency would help lower the cost of payments and bring the unbanked into the financial system.

No banks were present amongst Libra's dozens of initial backers when the project launched last month, although Facebook has said it is in talks with banks and expects banks to have joined the Libra Association by the time the paroject launches next year.

The PBOC is paying "high attention" to Libra, according to Wang Xin, director of the bank's research bureau.

He said that if Libra can be successfully launched, it may challenge the existing United States dollar-centered worldwide monetary system, a possibility that must be closely monitored.

Many global central banks, including the European Central Bank and the Bank of England, have voiced concerns about this digital currency.

Facebook Libra is a stablecoin backed by United States dollars and it is quite different from Bitcoin, but it still works on the principle of decentralization (at least to a degree) which has become major concerns amongst regulators. Wang's discussion of the matter indicates it might also be used as a reference for bank interest rates on deposits.

We have seen plenty of central banks conduct research on issuing CBDCs, although there hasn't been much activity past the exploratory phase.

The CEO of Facebook's cryptocurrency project, David Marcus, has written to assure the powerful US House Financial Services Committee that Facebook is proceeding with caution as it works to launch Libra.

However, China can not make such a regulation. The program began in 2014, led by former governor Zhou Xiaochuan. The department, primarily in charge of traditional currency management, is shifting to digital currency innovation because the use of cash is declining in China amid booming digital payment systems.

Other reports by iNewsToday