London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

China warned not to rush into creating digital currency to rival Facebook’s Libra, instead join global debate

China warned not to rush into creating digital currency to rival Facebook’s Libra, instead join global debate

China has fast tracked development of its sovereign digital currency, but a former central bank deputy governor has urged China to think about its response. Central banks from Canada, Britain, Japan, and Sweden, as well as the European Central Bank, this week joined forces to look at ‘cases for central bank digital currency’

A new theory appears to be emerging in China with regards how it should cope with the potential challenges from Facebook’s blockchain digital currency Libra, with suggestions it should shift towards working with other nations to regulate the sector rather than fast-track its own alternative medium of exchange.

Debate continues over whether and how China’s central banks should issue its own digital currency, with concerns mounting that popularity of Libra may further enhance the dominant role of US dollar in the digital era.

China’s yuan is not expected to be included in the underlying assets of Libra, while the People’s Bank of China has cracked down on cryptocurrencies such as bitcoin, and has also seemingly made progress in developing a sovereign digital currency.

But Zhu Min, a former deputy governor at the People’s Bank of China, has urged China to further consider its response to Libra, which is backed by a group of hard currency assets and is expected to be launched this summer.

“I think it’s critically important to join the discussions and take part in coordinated global regulation of Libra,” Zhu was quoted as saying by Sina.com.

Zhu added that the central bank’s digital currency research scheme, officially known as Digital Currency Electronic Payment, is a “natural process”, suggesting that there is no schedule for the launch of China’s sovereign digital currency.

And Zhu is not alone in calling for a global regulatory framework covering digital currency that could involve China.

Ba Shusong, a former researcher at China’s State Council Development Research Centre, who currently serves as chief China economist for the Hong Kong stock exchange, said that a framework overseen by a multilateral institution is needed to monitor digital currencies such as Libra as they have the potential to reshape the global financial system and challenge existing national monetary authorities.



Many issues surround digital currencies because their usage is not limited to any single country, Ba told a seminar at the Asian Financial Forum in Hong Kong in January.

Ba warned, that with different countries at various stages of their economic and policy cycles, the rise of digital currencies could create tensions among central banks and regulators as digital currencies can make it difficult for central banks to manage their foreign exchange controls.

“You would need to first improve the regulatory framework for [financial] technology,” Ba added. “There is a need for global cooperation for an alternative regulatory framework.”

Ba said that Facebook’s Libra raised questions about how a project of its size should be regulated to guard against its potential use for illicit means including money laundering.

This week, Vodafone became the latest company to leave Facebook's digital currency project after backers including PayPal and Mastercard also left The Libra Association amid regulatory scrutiny from around the world.

“We will continue to monitor the development of the Libra Association and do not rule out the possibility of future cooperation,” a Vodafone spokesman said in a statement.

Earlier this week, the Bank of International Settlements announced that that it had created a group involving the central banks of Canada, Britain, Japan, and Sweden as well as the European Central Bank to “share experiences as they assess the potential cases for central bank digital currency”.

Hiromi Yamaoka, former head of the Bank of Japan’s (BOJ) division overseeing payment and settlement systems, said the decision was a sign of how Libra has triggered global competition among central banks to make their currencies more appealing.

“The latest decision [by the six central banks] is not just about sharing information. It’s also an effort to keep something like Libra in check,” said Yamaoka who, during his time at the BOJ, was directly in charge of negotiations on new technology.

“Something like Libra would make transactions costs much cheaper. Major central banks need to appeal that they, too, are making efforts to make settlement more efficient with better use of digital technology.”

Cheney Tsoi, president of the Asia Blockchain Society, argued that bitcoin, the most widely used cryptocurrency, is successful because of its “decentralised” nature.

The blockchain technology that underlies all cryptocurrencies allows individual holders of the currency to control its increase and distribution, with no central authority overseeing the process.



But for other less successful digital currencies, their recognition could be greatly enhanced if central banks were to introduce their own government backed and controlled digital currencies.

“Innovation starts with the private sector, but for big scale use, it will need government support. The introduction of digital currencies by central banks may bring about new usage. We see a good trend,” Tsoi said.

Zhu Jiang, general manager at Kingsoft Cloud, said that at the moment, the physical world and virtual world were in the process of converging.

Zhu added that digital assets could be instrumental tools in the future, but said they still need the backing of government policies.

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×