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  • Libra can’t function as a cross-border fund transfer option without support from central banks.
  • “The quality of the code isn’t stable:” PBOC.

Facebook Inc. plans to issue a cryptocurrency called Libra will have to fall under the regulators’ eye. This is according to the views of the deputy director of the People’s Bank of China’s payments department, Mu Changchun.

Changchun says that the plan to utilize Libra in cross-border payments “won’t be sustainable without the support and supervision of central banks.”

According to Mu cryptocurrencies can be utilized in lending activities and have the ability to interrupt with monetary policy as well as lead to foreign exchange risks especially for economies with volatile fiat currencies. Besides, Facebook has not taken a clear stand against money laundering and terrorist funding activities. Moreover, the company has not said how user privacy was going to be achieved.

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Apart from Bloomberg, Caixin published almost the same sentiments from Mu this past weekend saying: “In the longer term, the yuan will be damaged by Libra if it’s not convertible.” Mu added that PBOC had already run tests on Libra’s code and found that its early stages and “the quality of the code isn’t stable.”