A senior central bank official has said that China plans to launch cryptocurrency similar to Libra from Facebook. The new cryptocurrency proposed by China will have some similarities with Facebook’s Libra and can be used across China’s major payment platforms, such as WeChat and Alipay.

“The development of the currency will help protect the country’s sovereignty from foreign exchange as the commercial applications of these currencies expand”, said Mu Changchun, deputy director of the People’s Bank of China Payments Administration.

Mu added “the cryptocurrency would be as safe as banknotes issued by the central bank and could be used even without an Internet connection. It can also be used on Tencent’s WeChat, and on Alipay supported by Alibaba”.

The Chinese central bank set up a research team in 2014 to explore the launch of its own currency to reduce traditional paper money trading costs and strengthen policymakers’ control over money supply. Since then nothing has been announced, but Mo announced last month that the cryptocurrency is almost ready.

Some analysts say China appeared to be pushing for digital money after the US social networking giant Facebook announced plans in June to launch its currency Libra.

Mu said the Chinese digital currency will strike a balance between allowing anonymous payments and preventing money laundering. Without going into details, he said, it would carry some similarities with Libra’s design, but it would not be a direct copy.

The central bank’s cryptocurrency has the advantage that trading platforms can, in theory, go bankrupt, causing losses to users. Its ability to use offline will allow transactions to continue in cases where communications are disrupted, such as an earthquake.

Source : Reuters