For China’s Crypto Czar Facebook-led Libra Might Not Be Stopped The czar of China’s crypto currency believes that stable crypto currency advancement cannot be stopped now even though the world’s powers have not welcomed Facebook’s Libra.
Mu, who officially started work on September 6 as a new director of China’s Digital Currency Research Institute, held six conferences on an online training platform a few days before Mu,In the series, Mu responds to a series of crypto questions, from LIBRA’s technical characteristics to potential integration with the international currency system, revealing the advantages of China’s own digital currency over Libra. , Libra is not welcome by any country, but it can still be unstoppable, Mu Mu said in the third lesson of the series. Rağmen Despite strict regulations it is not possible to prevent people from buying Libra completely. ”
Mu explained that the most thing a central bank can do to prevent Libra from entering a country is to ask all payment institutions and commercial banks not to process any transactions related to Libra.
However, he gave an example of how the underground Bitcoin trade in China could work, saying that there are still a few back channels for users to circumvent the Libra purchase ban.
Although China’s stock exchanges blocked bitcoin transactions, while payment agencies and commercial banks were prohibited from performing any bitcoin transactions, according to Mu, there are some institutions that use virtual private networks (VPNs) to buy bitcoin from foreign exchanges.
This also applies to the Libra. Even if Facebook is blocked in China, people will use indirect methods to buy it from abroad after the Libra appears, Mu Mu said. But he thought there was only one possibility of stopping the Libra: a If the US legally prohibits the Libra, the Libra will certainly be stopped. ”
It is possible that the Libra will become a dominant international currency, as long as the US does not impose a legal ban on the Libra and other central banks loosen regulations over time. Noting Zimbabwe, Mu said that there were a few extreme cases in which a country fully embraced the Libra – with widespread inflation – announcing it declared last year that it would meet any alternative currency.
Fighting Monetary Sovereignty
He said that if one of the fundamentals of monetary policy is that the central bank can control the supply and demand of the local currency by adjusting the interest rate, the Libra will be a destabilizing force.He said that effective monetary policies are very important for a country’s economy, the Libra will eliminate this power.
Mu, “If we allow Libra to enter the market, we would open underground economic channels,” he said. Mu, “China will be difficult to manage foreign currencies and capital outflow of $ 50,000 will be less effective,” he said.
He said that controlling the flow of capital and preventing money laundering were “deeper reasons” behind the collapse of China’s first coin offerings in 2017. Mu said that about 15% of last year’s international payments were encrypted assets, but CoinDesk was unable to find this report, but referred to a survey by the block chain company Clovr.
While Mu announced that Thailand and Vietnam would lose control of their currencies and interest rate policies due to weak currencies, the Libra could inflate the local currency because it tends to buy the crypto currency, causing inflation and devaluation of the assets brought by the local currencies.
Repair the Roof Before a Rainy Day
Earlier this year, China announced plans to launch the DCEP – Digital Currency Electronic Payment – as a stable domestic competitor in the Libra model. Mu pointed out that DCEP would not be a copy of Libra, but compared DCEP to Libra in central bank statements and how to use the coin by consumers. China’s national digital currency plan will be fully supported by the central government and fixed to the Chinese yuan. “One of DCEP’s goals is to replace cash,” Mu said. Since DCEP is not linked to a bank account, the currency can allow users to make anonymous transactions, which will give the same advantage as Libra in terms of digital payments.
If you’re using Libra, there’s a possibility that Facebook will follow you, but according to Mu, the same applies to DCEP. The new digital currency will identify specific patterns of behavior and identify users using big data, Mu said, noting that technology can “help the government finance money laundering, tax evasion, and terrorist groups.”Mu, “We must defend our monetary sovereignty and currency, repair the roof before a rainy day,” he said.