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China Should Prepare Digital Yuan to Counter Facebook Libra: Ex-PBoC Chief

Daniel Palmer
China should revamp its plan for a national digital currency in the face of Facebook's Libra cryptocurrency, says the central bank's former head.

In the face of this new risk, even if not a major one for China, the government should “make good preparations and make the Chinese yuan a stronger currency,” according to Zhou.

One way forward would be to enable non-specified “commercial entities” to issue digital yuans, as Hong Kong allows with its dollar.

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The system in Hong Kong allows several banks to issue HKD banknotes backed by U.S. dollar reserves, while the de facto central bank, the Hong Kong Monetary Authority, works to maintain a peg to USD.

The Post spoke to a senior analyst at Orient Securities, Chen Dafei, who said he interpreted the comments as meaning that major tech firms like Alibaba and Tencent – which have already built out sizable payments networks – could potentially take part in the issuance of a national digital currency.

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