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JulThe white paper on cryptocurrency project “Libra” by American social networking company Facebook was officially announced on June 18, 2019. After the announcement, Facebook's share price soared and rose nearly 500 billion US dollars. In Libra's white paper, Libra's mission is described as “building a simple, borderless currency and financial infrastructure for billions of people” and advocates the creation of a “global monetary and financial infrastructure as a public good for the design and management of the ecosystem, promotes the ambitious goal of “people can enjoy better and more affordable open financial services regardless of identity, region, occupation, rich or poor”. At the same time, the white paper triggered an international hot debate. Many international heavyweights including Governor of Bank of England Mark Carney and Chairman of Federal Reserve Jerome Powell expressed their views on this incident.
China Mobile's payment, represented by Alipay and WeChat payment, is very rare and highly proud of its global leading position. Besides, China's Internet finance and financial technology is also based on mobile payment such as Alipay and WeChat payment, and has followed a series of financial innovations. Nowadays, Alipay, Yu'ebao and Xianghubao, which are called “Lucky Sanbao” of Ant Finance, have become the representative financial innovation products of the world, including the world's most popular open banks, which is the most successful in the world. The case is Alipay. In the special meeting on data monopoly, the author and Gao Hongbing, Vice President of Alibaba and President of Alibaba Institute mentioned this issue, also mentioned the UnionPay monopoly, Alipay's innovative development, and China's current global status. Today, Alipay and WeChat payment have become the leading mobile payment companies in the world, and they have a certain advantage in the field of mobile payment. For example, in July 2018, this kind of transfer payment from Hong Kong to the Philippines, this is also the active exploration and brave innovation of Ant Finance in the field of cross-border payment based on block chain technology.
Innovations in the financial technology sector are very rapid, both domestic and international. The Libra project is a bold innovation attempt by Facebook recently. For such innovations, some of the government's policy regulatory legislation may not be able to cope with the first time, but our Internet high-tech companies such as Alibaba, Tencent and Huawei should be actively responding to such a new challenge.
Facebook issued currency or similar large-scale Internet companies in the United States, which has been foreseen by the author two years ago. After the central bank banned ICO bitcoin transactions on September 4, 2017, it had a significant impact on the market. At that time, the author believed that a large amount of ICO going out would cause Chinese companies to be tied up. The financing of ICO is crowdfunding, and it is precisely because of crowdfunding that the appreciation of Bitcoin has triggered the block chain boom. Specifically, prohibiting ICO is a good thing to prevent risks, but it has constrained Chinese companies to raise money. I found that this wave of currency fluctuations has caused the funds of the people of China, Japan and South Korea to be collected by the companies from the United States. Therefore, on the one hand, Chinese enterprises cannot raise funds and cannot issue coins; on the other hand, the funds of the Chinese people have been taken away. The funds were unknowingly seized by American companies, and they were not subject to foreign exchange controls, and the government could not protect them. This problem is very serious. US financial institutions or large Internet companies are likely to prepare to issue currency, which is to determine the dominance of the dollar in the digital world space, or its position in the field of digital credit. This goal is entirely possible. Especially in the context of the Sino-US trade war, we should anticipate the possibilities.
All in all, we can't circumvent the possible risks by preventing technological development, and let American companies build a digital currency system through block chain technology, which can attack on Alipay or WeChat Pay, which have achieved global mobile payment leadership. Therefore, we should respond more actively, to study such a model of them and how we should respond in the next step.
In the face of Facebook's currency program, BAT and other large Internet companies should work together to establish a system of alliance chains, issue corresponding Cokens, and then further study how to continue to maintain some of the advantages and ecology of our characteristics, especially It is necessary to meet the national strategic goals of the Belt and Road Initiative. Of course, it is better to be able to combine the digital currency research of the central bank, because the author also cooperates with the central bank, especially the currency research institute, to carry out research on currency of digital law. Therefore, I hope that the research institute of the Central Bank can further accelerate the implementation of the currency of digital law, at least in the countries along the Belt and Road. This should be more important for a reasonable response to Facebook's challenges in the field of mobile payments.
YANG Dong is the Director of the Center for Research on Finance Technology and Cyber Security of National Academy of Development and Strategy, Renmin University of China.
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