Libra’s Davis Marcus has warned Washington that China will win if they decide to block Libra. He said that Bejing is ahead in terms of setting up digital payments with a global reach.
He went on to say:
“The future in five years, if we don’t have a good answer, is basically China re-wiring” a large part of the world “with a digital renminbi running on their controlled blockchain,” Marcus said.
The Chinese government seems to be much more open to the prospect of a digital coin as it has been said that they are creating their own state-owned coin.
He also warned about the prospect of “having a whole part of the world completely blocked from U.S. sanctions and protected from U.S. sanctions and having a new digital reserve currency” with no alternative, speaking in an interview with Bloomberg.
US sanctions are a way of controlling economies. In recent times US President Trump has used sanctions to punish or bully Iran and Turkey. It is vital for the US government to remain in control of sanctions and David Marcus has a good point in bringing it up. We also heard from some Fed members earlier in the week saying that something like Libra could disrupt the financial mechanism of lending and interest payments. The central banks lend out to retail banks who then charge interest for loans and mortgages etc. If cryptocurrencies take over how will they be able to manage interesting rates and lending practices.
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