At a hearing before the House Financial Services Committee in October 2019, Facebook CEO Mark Zuckerberg was treated to a barrage of questions from the audience.
It was one of the most controversial issues of discussion throughout the hearing whether or not Facebook wanted to introduce its own cryptocurrency, code-named Libra, at some point. These developments upset government officials, who were concerned about the stability of the financial system, which is dominated by banks. Zuckerberg, on the other hand, went on the offensive in order to defend his initiative. As soon as the Libra white paper was out, he claims, “we observed [China] sprint to attempt to construct a system like this quickly, a china coin.” He claims that this is what happened.
We cannot afford to rest on our laurels if we are to maintain our position as the world’s premier technical powerhouse in the future. China now has the strongest central bank digital currency (CBDC) in the world, more than a year and a half after Facebook’s ambitions were first thwarted by the Chinese government. He was presenting two possibilities to the United States authorities: Facebook or China.
Since last year, the new “Digital Currency Electronic Payment” (DC/EP) system has been tested in a number of places around China to see how well it works. When compared to other digital currencies, the yuan is a one-of-a-kind asset. Rather than being a currency that argues for less control and regulation, Bitcoin, on the other hand, is a money that promotes for greater control and regulation.
DC/EP could be utilized by the Chinese Communist Party (CCP) to further monitor and manage the country’s already heavily regulated economy, which is already heavily regulated. Mr. Zuckerburg and a few others believe that the young project could be used to erode America’s grip on global finance, as he had feared.
Incentives Are Offered By The CCP To Encourage Participation In Trials
Mobile payment companies WeChat and Alipay are at the forefront of the industry in China, which has one of the world’s most advanced digital payment systems. To accept payments for products and services, both systems rely on a smartphone app, whereas the DC/EP system operates in a similar method but using digital money that is backed by a central bank.
China’s government, according to cryptocurrency author David Gerard, is concerned about the monopoly that WeChat and Alipay have established. In recent weeks, “they’ve been slicing [them] like crazy,” he exclaimed.
Financial aims and market dominance are being overstretched in ways that could cause problems, and they want to make sure that this does not happen.” The new money has already been given out in thousands of yuan amounts as part of Beijing’s testing projects in major cities, and discounts have been offered to individuals who use it. Competition and visitors to the 2022 Winter Olympics in Beijing may be able to use digital yuan, according to Li Bo, deputy governor of the People’s Bank of China.