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Former China’s Central Bank Governor: Libra Represents Digital Currency Trend and China Should Take Precautions

Abstract : The idea Libra proposes will impact not only on traditional businesses and payment systems. Its attempt to peg with a basket of fiat currencies reflects a potential trend of global currency.

ChainDD
ChainDD

Aug 07

In a speech delivered at a recent seminar about China’s reform and development on foreign exchange management, Zhou Xiaochuan, former Governor of the People's Bank of China, noted Facebook’s stablecoin Libra has two major advantages over previous digital currencies: one is to avoid speculation, another is to improve cross-border payments, especially in developing countries. But Libra still faces problems on anti-money laundering and custody of assets.

According to the speech text shared by Sina Finance, Zhou expected while we can’t determine whether it will succeed or not right now, Libra’s idea will shock existing institutions. Libra’s development represents digital currency’s trend. The idea it proposes will impact not only on traditional businesses and payment systems. Its attempt to peg with a basket of fiat currencies reflects a potential trend of global currency.

As to how renminbi, China’s fiat currency, should respond to such future trend, Zhou said it’s necessary for China to take precautions. He highlighted to keep strong position may bring China an advantageous position in the whole renminbi globalization process.

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