Zhou Xiaochuan, the chairman of the People’s Bank of China from 2002 to 2018, has come out saying that Libra would work better if controlled by the International Monetary Fund (IMF).
China has been watching Facebook’s Libra digital currency plans closely. As BeInCrypto reported previously, the country led the world in Libra-related search inquiries on Google when it was first announced. Now, a top economist and official in China has come out with his thoughts on Libra — and he believes a private company like Facebook should not hold this much power.
Leading Chinese Economist Comes Out Against Facebook’s Libra Plans
Zhou Xiaochuan was the chairman of the People’s Bank of China from 2002 to 2018. He is considered the be the most influential economist in the country and has, for the first time, made public his thoughts on the Libra. He told reporters, “People will question the motive of Libra as it’s initiated by a private company, it works better if it’s in the IMF’s custody.”
The news came out today and was first reported in the English-speaking world by reporter Dovey Wan (@DoveyWan).
ZHOU Xiaochuan, Chairman of PBOC (2002 to 2018) the MOST influential economist and monetary governor in China, publicly commented on Libra today
“People will question the motive of Libra as it’s initiated by a private company, it works better if it’s in IMF’s custody” pic.twitter.com/wMw8n1emI4
— Dovey 以德服人 Wan
(@DoveyWan) November 8, 2019
In short, it seems that central bankers are becoming more attuned to stablecoins and what they bring to the table. China, of course, is competing with the Libra choosing to create its own state-backed stablecoin. The country is also likely concerned that the Libra will serve as a vehicle for further U.S. currency dominance. The Libra is backed by a basket of fiat currencies but will be mostly made up of dollars.
Xiaochuan bases his argument on the fact that the Libra might use its power to eschew the law. Although Libra claims to be audited by third-parties, Xiaochuan would prefer it be run by the IMF. This way, a private company like Facebook would not be able to use the Libra to create unprecedented private power for itself.
A Stablecoin ‘Arms Race’ Is Emerging Globally
The conversation is certainly an interesting one, and this is definitely not the last time we’ll be hearing about it.
With the Libra set for launch sometime in the coming year or two, we can expect further geopolitical issues to come to the fore. After all, we are currently amid something of an ‘arms race‘ between governments rushing to create their own stablecoins. It remains to be seen how all of this will play out.
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