The CEO of Huawei Technologies, Ren Zhengfei, has recently said in an interview that China has the ability and, therefore, should launch its own digital currency to compete with Facebook’s Libra.
Zhengfei made the comments in an interview with the Italian news website L’economica. When asked by L’economica on whether Libra being linked to the US Dollar maintains the USA’s hegemony and whether Chinese banks and companies will have access to Libra, Zhengfei said:
“Even China is able to issue such currencies, why wait for Libra? The strength of a state is greater than that of an Internet company.”
The question wether China should allow Facebook’s Libra is, of course, an important topic. With the tensions between the US and China heating up already multiple times due to the trade war, it is not strange to think that China would rather issue their own cryptocurrency.
The Chinese central bank, the People’s Bank of China (PBoC), expressed their concerns about Libra’s developments a few weeks ago. According to the PBoC, Libra could be a danger to the country’s economy, mainly because Libra is pegged to the US Dollar and that is extremely unfavorable for China.
According to several rumors, Beijing is already developing its own digital currency, which should be revealed in 2020. There are enough tech giants in the country who would like to and could take on this development. One of those companies, Huawei, seems to be interested in a Chinese version of Libra.
One of the reasons behind Huawei’s interest in a Chinese Libra, might be that US President Donald Trump recently issued a statement revealing that Huawei may now resume trading again with American companies. The administration blacklisted Huawei in May 2019 at the height of the trade war, effectively halting its ability to buy U.S.-made chips.