China’s Central Bank Digital Currency to Be Better Than Facebook’s Libra, Says Official

Citing massive competition from Facebook’s Libra launch in 2020, China central bank - People’s Bank of China (PBoC) - is taking early measures to bring its central bank digital currency (CBDC) in the market.

As per the Shanghai Securities News report, Mu Changchun, deputy director of the People's Bank of China's (PBoC's) payments department, spoke about the PBoC’s digital currency at the Digital Currency Research Institute.

Mu said that the digital currency will have many similarities with Facebook’s Libra, with some features even being better than Libra. Besides, Mu also stated that the functional attributes of the CBDC will be much similar to the paper money, but just in the digital form.

While addressing the audience, Mr. Mu asked: "Why is the central bank still doing such a digital currency today when electronic payment methods are so developed? It is to protect our monetary sovereignty and legal currency status. We need to plan ahead for a rainy day.”

Further explaining some of the technical aspects of PBoC’s digital Yuan, Mu said that users can transfer it without internet network or an account. The user’s mobile phone just needs to have a wallet and the user can transfer money to others using NFC communication by placing the two physical devices nearby. “Even Libra can’t do this,” Mu added.

Additionally, the digital Yuan won’t require any banking account and is “free from the control of the traditional bank account system”. Mu also assured that they have taken enough care wherein the privacy of the users is not compromised.

He also adds that the digital currency distribution will take place through China’s commercial banks, just like its fiat currency. These banks need to have an account with the PBoC and buy the digital yuan at 100 percent value. Later, the users can open digital wallets for the digital yuan through other commercial organizations or banks.

Note that as per the earlier market reports, China’s central bank digital currency won’t rely entirely on the blockchain infrastructure. Last month, Mu said that the PBoC is all set to launch the digital yuan as early as November 2019.

Mu noted that the advantage of a CBDC over crypto tokens issued by commercial companies is that these organizations can possibly go bankrupt causing massive losses to the users.