It’s no secret that Facebook’s launch of Libra is going to have its impact on global cryptocurrency scene. There has been a lot of debate on how it can affect global economic and financial system, and there have also been proposals in the parliament of US and UK to halt its development. However, if Facebook manages to sail through these hurdles and Libra is launched, there’s a good chance that very soon we may also see the launch of one more cryptocurrency from another social media company. And this time it may come from China!
That’s right. According to a recent South China Morning Post report, after two years of banning cryptocurrencies People’s Bank of China (PBoC) is suddenly looking into the idea of a sanctioned cryptocurrency. And if they decide to move ahead in this direction, there can be no better launchpad than WeChat. The globally popular social media platform is not just a major channel of communications in China but also a major payments platform. So there’s a good chance that Chinese government may allow (or even ask) WeChat to come up with a cryptocurrency of its own. Wang Xin, Director of PBoC’s research bureau, has already made the concerns of his government regarding Libra very clear at a recent press conference. He had said:
“If Libra is widely used for payments … would it be able to function like money and accordingly have a large influence on monetary policy, financial stability and the international monetary system?”
Now, if WeChat is indeed allowed by the Chinese government to go ahead with a crypto of its own (which is very likely), let’s understand how powerful it can be. WeChat has 1.1 billion users globally. By comparison, Facebook’s user base is 2.3 billion. However, what Facebook doesn’t have already is a payment system, which is present in the ecosystem of WeChat. Currently, transactions through WeChat Pay are facilitated only in Chinese Yuan. But if a cryptocurrency is launched by them, it will change. And since that cryptocurrency will also be made available by China to the outside world for competing with Libra, it can further boost the power of WeChat in global payments industry.
It’s also worth noting that WeChat has previously had its own romance with cryptocurrencies. Not only they used to allow crypto payments through their Payments platform but also there were social media accounts of many crypto projects on WeChat. But when the government decided to crack down on crypto, WeChat also obliged with it and banned all accounts of crypto projects. Crypto payments were also blocked on WeChat Pay.
It will be interesting to see if WeChat Pay comes up with its own cryptocurrency project in the future. And why only WeChat Pay – its rival AliPay can also do the same! But that will happen only after a go-ahead from the government. Now let’s see how long their government takes to give it a shot!