In an interview with the Italian media, Huawei founder Ren Zengfei has suggested that China should issue its own cryptocurrency that can compete with Facebook’s Libra project. Zengfei added that the power of a country is always stronger than that of an internet company.

His comments come after Zhou Xiaochuan, former Bank of China governor, suggested that Beijing could allow commercial entities to issue digital tokens.

China Considering Libra-like Cryptocurrency

Zengfei’s interview with Italian media mainly revolved around topics like Huawei being banned in the US, its controversial 5G equipment, and his daughter’s detainment in Canada. Towards the end, Fabio Savelli of the Evening Posts asked Zengfei whether Facebook would consider Chinese companies while issuing its digital currency.

According to a Chinese cryptocurrency insider, Zengfei proceeded to recommend that China launch its own digital currency to counter Facebook. He suggested the possibility that the social media giant could be colluding with the U.S. government and working against the Chinese population’s best interests. Zengfei added that with the backing of the Chinese government, the cryptocurrency could easily outpace Libra. His comments come hot on the heels of rising fear among the Chinese that Libra could potentially be used to hurt the country’s economy and political status.

In April of this year, The Chinese government was rumored to be on the verge of banning all cryptocurrency mining activities. The government has notably already banned Initial Coin Offerings (ICOs) since September 2017.

Stiff Competition

In a speech in Beijing on July 11, former Bank of China governor, Zhou Xiaochuan, said that China should emulate Hong Kong’s monetary system for its digital currency issuance, where commercial entities are allowed to issue banknotes backed by private currency assets. He said that by allowing commercial entities to issue digital currency, China can avoid “huge fluctuations” often observed in the cryptocurrency market. Chen Dafai, senior analyst at Orient Securities suggested that technology firms like Tencent and Alibaba that already have sizable payment networks could also issue the digital currency.

Wang Xin, head of research division at the People’s Bank of China, spoke to an audience at Peking University earlier this month on the matter, where he asserted that Libra could influence international monetary policies and affect financial stability. He said that the Chinese central bank is accelerating its efforts to introduce a state-backed digital currency since it could improve the country’s monetary policy and payment systems.

Following the Senate hearing where Head of Libra, David Marcus, mentioned Facebook’s aim to compete with AliPay and WeChatPay, Libra became the second-largest trending topic on Chinese social networking platform, Weibo. The topic attracted over 220 million views and thousands of comments.

Do you think governments around the world will now explore the possibility of a Libra competitor to maintain control over their economies? Let us know your thoughts in the comments below.