China, because it invests in state cryptocurrencies and blockchains

The announcement of the launch of a digital currency by the Chinese central bank is the sign of the acceleration with which Beijing wants to establish itself also in the fintech field

While the future of Libra appears increasingly uncertain, the China has publicly announced the launch of its digital currency. During the inaugural speech of the Bund Financial Summit from 27 to 29 October in Shanghai, Huang Qifan, vice president of the China International Economic Exchange Center, confirmed the rumors that had been circulating since last summer on Chinese digital currency. The People's Bank of China (Pboc) will issue the denominated currency DCEP (digital currency electronic payment), developed thanks to blockchain technology after one study lasted 5-6 years.

"The Pboc will probably be the first central bank in the world to introduce a digital currency", Said Huang, who did not spare criticism of Facebook, predicting that Libra will not succeed: "In the digital age some companies try to challenge the sovereign currency by creating financial products such as bitcoins and Libra. These decentralized coins based on the blockchain are not part of the sovereign currency".

Unlike Libra and normal decentralized cryptocurrencies, the issuance of the new Chinese currency, in fact, will take place under the supervision of the Chinese Central Bank. Central control is a key feature of Chinese digital currency, so much so that i bitcoins are banned in China.

The chain of blocks

Different situation for the blockchain, the technology behind bitcoins. Recently, President Xi Jinping stressed the important role of blockchain technology in the new cycle of technological innovation and industrial transformation, recommending greater efforts to accelerate its development in areas such as digital finance, the Internet of things, intelligent production, distribution chain management and digital asset trading. After Xi's statements, the bitcoin price boomed 40%.

Testifying to China's growing attention to the world of cryptocurrencies, the publication of the ranking of the 35 most promising projects of the sector, by the Center for information and industry development (CCID), an institute under the control of the Ministry of Industry and technological information of Beijing.

The first of January 2020 will then enter into force the first law on cryptography, approved last October 26th. The law states that the state encourages and supports research and the application of science and technology in cryptography and guarantees confidentiality, even if it does not explicitly mention cryptocurrencies.

However, it seems clear that Libra will hardly be able to act as a barrier to Chinese financial leadership, as Mark Zuckerberg had declared before the United States Congress. Soon the first Chinese digital currency will be real and in addition to challenging Libra, it could change the digital payment industry in China, now dominated by the duopoly Alipay (the Alibaba platform) and WeChat Pay (owned by Tencent), which together own 93% of the mobile electronic payments in China. However, Dcep will be supported through the two leading Chinese platforms, which will facilitate its spread.