Central Bank of China: Libra may force us to speed up the development of our own digital currency

The threat that Facebook's cryptocurrency project poses to traditional money may force the People's Bank of China (PBoC) to accelerate the development of its digital currency, a spokesman said.

Speaking at the Institute of Digital Finance at Beijing University this Monday, Wang Xin, head of PBoC's research bureau, said: "If Libra is to be used universally to make international payments and act as money, will it have a corresponding strong impact on monetary policy, financial stability and the international monetary system?

According to him, the associated risks force PBoC to "monitor the situation very closely" and may motivate the regulator to accelerate the development of its own digital currency, which has been going on for several years.

"We started early, but there is still a lot of work to be done to consolidate our dominance," he said.

Wang explained that the Central Bank of China needs to know what currencies will be used to secure Libra and what place the US dollar will occupy in its basket.

"It may happen that there will be, in fact, one boss - the U.S. dollar and the United States itself. This will entail a series of economic, financial and even international consequences," he added.

The representative of PBoC also confirmed that they are working with various market participants to create their own digital currency. When the tool under development can see the light, he did not specify.