The renowned Chinese internet-based technology conglomerate, Tencent Holding, joined the queue earlier in the week when it released its blockchain whitepaper for 2019 that suggests Facebook’s cryptocurrency Libra poses as much threat to the current digital payment systems as much as it does to the traditional financial world.
Before now, Facebook’s forthcoming crypto coin Libra was grossly criticized for poor regulation and governance as well as its supposed pull on the traditional financial world. There are concerns that a social media platform as big as Facebook would be unstoppable with a native digital currency.
Well, Tencent is weighing in on the virtual drama, crying out that digital payment systems such as Alipay are not out of the woods either. While Libra will be supposedly targeted at payment systems in developing countries, Tencent believes that “in fact, it’s a safe play resorting to the strategy of ‘encircling the cities from the rural areas’, in which Libra coin could quickly enter markets with underdeveloped financial infrastructure, especially those that do not have a credible local currency of their own, before it sets its foot in developed markets.”
Tencent stresses even further:
“If Libra successfully launches, it will undoubtedly significantly bring an impact on the global payment space, and the entire financial industry around the world. It will drive the industry’s innovation and development in user experience, service cost, technology and business model, it will also lead to further industry reshuffle.”
Although Tencent didn’t exactly state how it will tackle the threat but it did state that it has no intention of joining the Libra team.
Not to be biased, Tencent does acknowledge the positive influence crypto coins and blockchain-based tokens as a whole can bring to the table; nonetheless, it shares the same view as many out there who believe a proper regulatory environment is critical to the healthy operation of such crypto projects.
One cannot entirely rule out the effect Libra would have on global financial institutions, including digital payment systems. This is yet another reason financial regulators are anxious with the launch of the digital coin.
Some studies show that the announcement of Facebook Libra was received with a warm welcome among crypto enthusiasts. China, for example, is ranked number one on the list of countries with the highest searchers for Libra.
With crypto and ICOs totally banned in China, it is a no-brainer that its citizens are on the lookout for possible replacements. Even more, Facebook’s boss, Mark Zuckerberg, insinuated that its global coin Libra may substitute for the native coin that China’s central bank has been working on for about 2 years now.
