Facebook’s new Libra project has given China cryptocurrency policy makers a shot in the arm. If Facebook launches a coin to buy and sell things on its platform, how long before one of China’s biggest digital payments operators gets one too?
The South China Morning Post reported Monday that the People’s Bank of China (PBoC) is looking into an officially sanctioned crypto after banning them two years ago. If they do it, there is no better place to start than WeChat, the Tencent-owned social media platform that is as much a basic messaging program as it is a digital payments system.
The PBoC is worried that Facebook’s Libra could potentially pose a challenge to Chinese cross-border payments, monetary policy and financial sovereignty.
“If Libra is widely used for payments … would it be able to function like money and accordingly have a large influence on monetary policy, financial stability and the international monetary system?” asked Wang Xin, director of the Chinese central bank’s research bureau during a conference at Peking University’s Institute of Digital Finance.
Facebook released a white paper in June about its blockchain-based payments system and crypto project.
Globally, WeChat has 1.1 billion monthly active users, a metric social media companies like to use because it better showcases who is using the platform rather than just who has an account on the platform but is not a regular user.