Governments in emerging markets should be given a greater say in the regulation of digital currencies such as Facebook Libra that could facilitate illegal capital flows and disrupt foreign exchange management, said a senior Chinese official.
China has been moving to embrace financial technologies such as blockchain, and is preparing to launch its own digital currency to rival Facebook’s Libra.
President Xi Jinping said last week that China should accelerate the development of blockchain technology, which sent the price of Bitcoin soaring and has boosted blockchain-related stocks.
“Financial technology can promote the opening up, innovation and development of a country’s financial market,” said Sun Tianqi, chief accountant of the State Administration of Foreign Exchange.
“But it could also bring a lot of illegal cross-border financial activities. This should be a matter of great concern to all countries, especially emerging markets,” he told a finance forum in Shanghai.
Sun’s comments underline Beijing’s antagonism towards Facebook’s Libra project. Politicians and regulators from around the world have raised concerns that Libra could be used for money laundering or even undermine the global financial system.
A recent G7 report said Libra must not go ahead until Facebook demonstrates it is safe and secure, and the project recently lost the support of a series of major backers including Paypal and Visa.
In China, digital currencies like Libra must abide by foreign exchange regulations, and must not replace the yuan in domestic transactions or “it should be banned”, Sun said.
Full news on City AM
© City A.M.
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article