Ever since its announcement, Libra has been accompanied by controversies. It was recently suggested by RBC Capital Markets analysts however, that an eventual stop to Libra’s release, could essentially give a monopoly to China’s central bank digital currency (CBDC) in the emerging economies.
Yesterday’s report from the Market Insider, showed that some RBC analysts believe that China is very pleased to see Libra’s current regulatory and inner struggles.
As Coinstaker reported earlier this month, the Libra Association has had a mass exodus starting with PayPal’s depature. After PayPal, MasterCard, Visa, Ebay and Stripe were quick to follow as the regulatory issues kept piling up.
RBC’s analysts believe however, that China’s already predicted this outcome and has recently shifted the development of its own CBDC into overdrive. The analysts state:
“If the final outcome of the US regulators is to fully dismiss Libra and not draft any regulations to encourage crypto innovation in the United States, China’s CBDC will have a green light to become the global digital currency is all emerging economies.”
Earlier this year, Coinstaker revealed that Tether had massive plans to issue a Chinese yuan-backed stablecoin.
A Chinese monopoly won’t create itself
It doesn’t take an economical genius to figure out that the mass exodus from the Libra Association is tied to regulatory concerns. Steven Mnuchin, the United States Treasury Secretary stated that Libra is simply not up to par with American Anti- Money Laundering (AML) standards.
Libra realized that they are not ready, that they are not up to par, says @stevenmnuchin1 about Facebook’s plan to start a cryptocurrency. "I assume some of the partners got concerned and dropped out until they meet those standards." pic.twitter.com/hrtR41LaSJ
— Squawk Box (@SquawkCNBC) October 14, 2019
According to the RBC analysts however, there are a lot of companies who are still interested in joining the Libra Association. Even those that left, might return under the right regulatory circumstances.
It’s actually crazy to think that we’re living in a World where Facebook’s project is the only thing that can fight a Chinese monopoly. By all accounts, the world’s recent infatuation with clowns seems to be a reflection of all levels of society and business.
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