China claims its digital currency is superior to Libra

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The Chinese central bank has a new digital currency chief who says its upcoming digital yuan has features not offered by Facebook Libra, Coindesk reports.

It says, Changchun Mu — previously deputy director of the payments and settlement division at the People’s Bank of China (PBoC) — recently stepped into the lead role at the Digital Currency Research Institute. A state-run news source revealed that Mu recently published details on PBoC’s digital currency — apparently being carried out in a secret office away from the bank’s Beijing headquarters — describing it as a digital currency and electronic payment tool with “value characteristics.”

“Its functional attributes are exactly the same as paper money, but it is just a digital form,” Mu said, adding that PBoC’s digital yuan will be able to be transferred between users without an account and without a mobile or internet network, something which makes it superior to Facebook’s Libra.

Mu pointed out that providing a user’s mobile phone has a wallet, the digital currency can be transferred to another person by placing the two phones in physical contact. Presumably, this feature is enabled by near-field communication (NFC), saying “Even Libra can’t do this.”

Shanghai Securities News also pointed out that PBoC’s digital currency also doesn’t need a bank account to be used, and is “free from the control of the traditional bank account system.” However, the digital currency will be delivered via commercial banks like fiat currency. The banks must open accounts with the PBoC and buy the token at 100 percent value.

Mu added that the main reason for developing the digital currency is “planning ahead” to protect monetary sovereignty and China’s legal currency.

Former People’s Bank of China (PBoC) governor Zhou Xiaochuan commented “Libra has introduced a concept that will impact the traditional cross-border business and payment system.” And added that in the light of this China should “make good preparations and make the Chinese yuan a stronger currency.”

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