Facebook Inc. has a warning for those in Washington determined to derail the company’s plans for creating a cryptocurrency: doing so would be a huge win for China.
David Marcus, the executive leading the company’s Libra initiative, said Beijing is plowing ahead in trying to stand up a digital payments system with global reach even as U.S. officials try to figure out how to regulate Facebook’s coin. Chinese progress could represent a real threat to U.S. influence, Marcus said Thursday during an interview at Bloomberg News’ Washington bureau.
“The future in five years, if we don’t have a good answer, is basically China re-wiring” a large part of the world “with a digital renminbi running on their controlled blockchain,” Marcus said. He warned about the prospect of “having a whole part of the world completely blocked from U.S. sanctions and protected from U.S. sanctions and having a new digital reserve currency” with no alternative.
Marcus’s comments come as Facebook struggles to persuade skeptical lawmakers and regulators that Libra is a good idea. Facebook’s June announcement that it had begun work on the cryptocurrency along with 27 partners sparked controversy that has led to congressional hearings, reviews by global regulators and even a Twitter rebuke from President Donald Trump.
Facebook has previously highlighted threats posed by China as part of a response to Washington’s concerns over the company’s reach. When Chief Executive Mark Zuckerberg testified before Congress in April 2018, he prepared notes to argue that China would be strengthened by a breakup of U.S. tech companies.
While the head of China’s central bank has said the country had no timetable for issuing its own digital currency, officials have signaled that they are taking research and development efforts seriously. A former leader of the bank, who started its crypto project, said a goal was to keep China from having to adopt a standard, like Bitcoin, designed and controlled by others.
To contact the reporters on this story: Ben Bain in Washington at bbain2@bloomberg.net;Kurt Wagner in San Francisco at kwagner71@bloomberg.net
To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott
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