After launching the Libra white paper and framework in June this year, Facebook has attracted the attention of people from all walks of life around the world. Its influence has far surpassed the digital currency field and has become a hot topic in the financial industry.
Today Libra is opposed by national regulators, and the founding members have withdrawn in batches. On the occasion of the official establishment of the board of directors and Libra's critical crossroads of development, last night's Facebook CEO Zuckerberg's hearing on Libra in Congress naturally became the focus of the world.
After listening to the lengthy hearing, Uncle Kai believes that the core content can be condensed into one sentence: Xiaozha reiterates Libra's vision of establishing a highly efficient universal financial system and works to dispel the doubts of legislators.
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For example, Libra needs to be approved by all US regulators, especially in anti-money laundering and counter-terrorism financing. Facebook will not participate in the Libra project until it is approved by the regulator. If Libra goes online without regulatory approval, then Facebook will be forced to withdraw from the association. And repeatedly stressed that Facebook is only one of the members of the Libra Alliance. In the future, Libra will be led by the Alliance, allowing Facebook and Libra to cut properly, avoiding the impact of the tree because of the big move.
There is not much new idea in these elaborations, and the content of written testimony published by Xiaozha on the day before the hearing is similar.
The only shocking and incomprehensible thing is that the US Congress discussed Libra and actually mentioned China 21 times. Why is the Libra hearing in the US Congress related to China?
In fact, China has been implicated in the written testimony of Xiaozha’s advance announcement.
As the media had an interview request, Kay took a close look at Xiaozha’s written testimony. Uncle Kay commented in an interview (see "Daily Sino-US Relations Cards? Cutting and Libra Relationships? Daxie Rui Zuckerberg Hearing Testimony"): Xiaozha's written testimony is fair and predictable. The only exception to this is the mention of China in one of the areas.
"Zachberg’s example of China’s digital currency is somewhat far-fetched . He mentioned that China is purely to take advantage of the bad relationship between China and the United States to touch the US Congress and the regulatory body. This is a technical issue."
But things are more serious than expected. Xiaozha succeeded in touching the nerves of US congressmen, and China became a high-frequency topic at yesterday’s hearing. Uncle Kay spoke with the data and verified the full-text version of the hearing through search. The audience made 21 mentions of China, Xiaozha said 11 times, and MPs said 10 times. In the 16 core articles of Libra about Libra, one out of every four articles directly mentions China.
Xiaozha's core logic about China and Libra: Congress should support financial innovation. If it does not support or even resolutely oppose Libra, Libra cannot support US dollar hegemony and cannot achieve American values. At the same time, some of China's infrastructure is better than the United States. The Chinese central bank will use this advantage to replace Libra. It will soon implement China's set of digital currency systems and standards around the world, seriously shaking the spread of US dollar hegemony and American values.
Such logic is full of loopholes and cannot withstand scrutiny. Because Libra and the Chinese central bank's digital currency are collectively referred to as digital currency, the difference is huge, it is not the same competitive relationship, and there will be no positive conflict.
First, the nature of the two is different.
Libra is a non-sovereign alliance digital currency, and the central bank plans to introduce a sovereign national digital currency, a non-sovereign, a sovereign, fundamentally different in nature, and the meaning behind it is diametrically opposed. The reason for Libra's unsuccessful progress is that the regulator is not at ease, and the root cause is that it is a non-sovereign digital currency, and the central bank's digital currency does not need to consider the issue of regulatory release, because the central bank itself is the regulator.
Second, the two functions are different
As Xiaozha reiterated at the hearing, “Libra is a transnational payment system and will not compete with sovereign currency.” China’s central bank’s digital currency is legally equivalent to the national sovereign currency, in addition to payment. The functions of settlement, pricing, reserve and other currencies.
Xiaozha told US officials that Libra will not affect the US dollar. Libra is only a payment system and will not compete with the national sovereign currency including the US dollar. But why is it competing with the Chinese central bank's digital currency? Obviously contradictory. According to Xiaozha repeatedly stressed: Libra is only a payment tool, and Libra's real competitors are Alipay, WeChat payment, Paypal, Visa and Master who are out of the alliance are reasonable.
Moreover, the world’s central bank’s digital currency research is not limited to China, but also the European Union and Sweden. It’s clear that there is ulterior motive in heads-up China.
Third, the two use different geographical scopes
Facebook is not accessible in China. The Libra Alliance does not currently have a Chinese company. Its planned reserve currency does not have a renminbi. Therefore, it can be foreseen that even if Libra succeeds, the probability will not cover China. From the perspective of the People’s Bank of China, The high probability also does not allow Libra to be used domestically. The central bank's digital currency will also be used in the same way as the renminbi, and the two wells will not make river water.
As for Xiaozha in Congress, “they (the Chinese central bank) can use it (the central bank’s digital currency) as part of the “Belt and Road” initiative, using their economic and political influence to enable it to be used in Asia and Africa. "This is not only lack of common sense, but also alarmist.
The internationalization of the renminbi has only taken a small step after decades of accumulation. Even if the central bank introduces digital currency, it must first be widely used and popularized in the country, so that it is possible to take the first step of internationalization. It’s too early to start demonizing the central bank’s digital currency, which is brewing.
This made Kai Uncle think of the female friends who often invited infrequent fitness to exercise together. They often raised the fear that playing tennis would make their arms thicker. Does running make the legs thicker? Uncle Kai looked at their weak winds, thin arms and thin legs, and thought to the bottom of their hearts: xx is a matter of temperament, professional athletes only consider, the eight characters are still not a glimpse, this is worried about where to go. (Of course, they do not rule out that they want to refuse Kay could not find a better reason.)
Finally, the time sequence is wrong.
Xiaozha repeatedly emphasized at the hearing:
“After Libra released the white paper, the People’s Bank of China immediately started (originally using the kickoff) digital currency plan and wanted to get ahead of Libra as soon as possible.”
This is the end of the cart.
In 2014, the central bank set up a special digital currency research team to conduct in-depth research on digital currency issuance and business operation framework, key technologies of digital currency, distribution and circulation environment, and legal issues. In January 2017, the central bank officially established the Digital Currency Institute in Shenzhen. The introduction of central bank digital currency has always been one of the focuses of the central bank over the past few years . When the central bank began to study the digital currency, Libra did not even appear in the shadow.
The central bank's acceleration of the digital currency launch process, more or less because Libra triggered global attention, but not as Xiaozha said, "it was because Libra launched, the central bank only started." This obviously does not match the facts.
Uncle Kay is worshipping Xiaozha and supporting Libra. Because of his personal charisma as a leader in the global Internet community, he is also deeply attracted by Libra's great vision.
However, Uncle Kay is very disdainful of this behavior: in order to achieve the purpose of promoting Libra, he will not hesitate to play Chinese cards, the logic is chaotic, the facts are not divided, and even the alarmist . In the period when Sino-US relations have entered a trough and the US Congress is extremely unfriendly to China, such an operation is tantamount to throwing a lighted match in the oil drum.
Actively introducing politics into business, this unconventional operation itself is a double-edged sword. Xiaozha also deliberately chose to choose the most sensitive period, the most sensitive occasions, and introduce the most complicated international relations between China and the United States. In the most complicated business plan to date , this wave of operation has really made Kai Shu amazed.
Such a result may have an astonishing lethality, and a small tie will hurt others.
Is it only by the People’s Bank of China to save Libra? This kind of problem that should not have appeared in the present may actually come true. Xiaozhe’s heart must be secretly cheering for the Chinese central bank’s early introduction of the central bank’s digital currency. It’s really ridiculous.
In short, this hearing will make Kai Un very disappointed with Xiaozha.