China’s Crypto Plans Against Facebook’s Libra May Spill Into Russia As Wellbr>
China’s State Council has recently approved PBoC’s (People’s Bank of China) request to start working on a nationalized digital currency in order to combat the influence that Facebook’s Libra may garner on the local market.
The Chinese government has notoriously been extremely aversive towards the blockchain, going as far as banning both trading and mining of the digital assets just within the span of two years.
Now though, it seems like the Central Bank has no other way to combat Facebook’s increasing dominance on social platforms aside from forming its own alternative for the Chinese population.
Naturally, it all comes down to differing political beliefs between the United States and China, which has been quite a tense issue for the past year or so.
It’s important to note that the trade war has been hammering down on the Yuan for as long as it’s been in motion. Despite the fact that China would benefit greatly from a weak Yuan based on how much they export, it’s still devastating for their economy as the CCP (Chinese Communist Party) wants to keep all the capital within the country in Yuan.
Should Yuan go too low, the whole GDP of the country is going to follow suit. Therefore, it’s important to maintain the relevance of the Yuan somehow, in the wake of Facebook’s dominance in the crypto space for the coming years.
The PBoC is already starting its operations on forming a nationalized blockchain platform for a digital currency, which naturally, will not be decentralized.
Friends to the North
There’s another country a little north to China which also has quite a bad relationship with the US and US-based companies.
Russia is also notorious for its aversive foreign policy towards United States products and goods. It even has an alternative to Facebook, called Vkontakte.
Although the control over the population isn’t nearly as severe in Russia as it is in China, it’s still probable that the Russian central bank could be pushed to introduce a nationalized digital currency in order to support the rubble.
Much like the Yuan, the Rubble is also very weak due to multiple sanctions from EU states and the US. Having Facebook hi-jack the digital payment systems in the country would jeopardize the Rubble even further, especially in the wake of the digital economy plan which had a $26 billion budget assigned to it for the next five years.
According to currency experts from Valutny Bazar, much like the Russian central bank got rid of offshore Forex brokerages from the country, it’s going to do the same with Facebook’s market dominance, but the issue will be that they won’t achieve it.
Facebook isn’t a small Forex company that needs to have an office in Russia to operate there. It’s enough for them to simply have access, and banning it would be a very controversial move from the Russian authorities.
Therefore, much like China, the Russian government could be forced to implement a digital currency in order to combat Facebook’s growing influence on the financial sector.
In the end, it will simply translate into more countries nationalizing the blockchain, but the way both Russia and China are going to implement it are sure to contrast the key value of the technology.
Should the same project stir up in Russia, it’s definitely going to be heavily centralized and monitored.