China’s Communist Party is the latest cheerleader for Blockchain, the technology underpinning Facebook’s Libra currency, with plans to use it to manage risk and ensure loyalty.
Applied in conjunction with artificial intelligence, Blockchain may help in cross-border financing and settlement and further liberalize China’s capital markets, Lu Lei, a deputy head of the State Administration of Foreign Exchange, said Sunday in remarks published by the South China Morning Post.
Blockchain, a distributed ledger that records online public transactions, is the foundation for digital currencies including bitcoin. It’s being examined for a variety of purposes beyond finance, including boosting energy grid security. The rush to embrace it in China comes after President Xi Jinping last week called for the country to “seize the opportunity” to embrace digital technology. China’s parliament passed a new law on cryptography Saturday.
“We are not quite sure how a new technology might evolve, but we must pay attention to control risk,” Lu said.
Facebook reignited global concerns about Blockchain in June after unveiling a plan to create Libra in the first half of next year. Co-founder and CEO Mark Zuckerberg testified before a U.S. House committee last week about the plans, which are seen by critics as a threat to the global monetary system and privacy.
Blockchain allows digital information to be recorded and distributed but not duplicated, making it ideal for cryptocurrencies. And China has big plans for the technology.
The People’s Bank of China is preparing to launch its own digital currency, according to the South China Morning Post. And a new app from the Communist Party’s propaganda office will allow users to pledge their loyalty to the party and then store their pledge on a blockchain which can then be shared and seen by others, CoinDesk reported.
- Facebook won’t launch Libra anywhere in the world until U.S. regulators approve, Zuckerberg said during his testimony last week, according to The New York Times.
- Bitcoin’s price topped $10,000 over the weekend after Xi’s comments, according to CNBC. Beijing restricted cryptocurrency speculation in 2017, though not Blockchain development.