China is about to release a digital currency similar to Libra

The Chinese central bank is working on a cryptocurrency similar to Facebook's Libra, a government official said this week, according to Reuters.

A Chinese central bank group has been studying digital currencies since at least 2014, but their efforts seem to have paid off in recent months. Last month, a mu announced that a Chinese digital currency was "almost ready".

The details of technology remain scarce, but it seems that the new currency – like Libra – will be tied to a conventional currency to retain its value. While Libra will be tied to a basket of conventional currencies, notably the dollar and the euro, the Chinese digital currency will be indexed to the yuan.

Mu said that cryptocurrency was designed to "protect our monetary sovereignty and our status as legal tender." Government officials in the United States and abroad have expressed concern that, if Libya were active, it could threaten the dominance of conventional government backed currencies.

The manager, Mu Changchun of the People's Bank of China, said the currency would be usable on major Chinese messaging platforms such as WeChat and AliPay. Libra, of course, is designed to be used on Facebook's own messaging products.

The currency could be issued by both the Chinese central bank and the financial institutions.

Mu said China's digital currency would strike a balance between allowing anonymous payments and preventing money laundering, Reuters reported.