- Chinese authorities are concerned that Libra may undermine yuan’s internationalization
- The controversial stablecoin has been critisized by global regulators.
The Central Bank of China is concerned that Facebook’s Libra and other stablecoin projects can undermine Chinese yuan’s internationalization, the official media outlet, Xinhua news, reported on Monday.
According to the central bank’s vice governor Chen Yulu, the adoption of digital currencies may weaken the effects of capital controls and impact the financial stability in China.
In a separate development, the head of the European Central Bank (ECB), Christine Lagarde, also expressed concerns about Libra launch. She believes that Facebook may use personal data from its social media platforms to gain an unfair competitive advantage over other stablecoins projects.
In a letter to the EU Parliament, Lagarde admitted, that stablecoins had a lot of benefits, but they should be approached with care. Regulators must make sure that the potential competition issues are tackled.
Meanwhile, to participate in Libra’s ecosystem, partners should invest $10 million. The company claims that currently there are 21 participants; however, no one has made a contribution yet.
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