People forget China’s trump card in dealing with trade disputes with US - currency manipulation, which sank global stocks, including the Dow Jones index (now down 1100 points since last Monday); meanwhile, Facebook’s Libra has China scrambling to develop its own digital currency.
2. While China has had a long lead (via WeChat and AliPay) over Facebook’s Libra, Libra represents a huge threat to China’s cryptocurrency ambitions. Facebook (which has 2.5 billion users - more than twice commanded by WeChat) hopes to roll out Libra in the first half of 2020.
3. If Facebook is able to convert a good number of its current users of Facebook properties (Messenger, Instagram, WhatsApp) into Libra coin holders, it could immediately leapfrog all of what China has done in terms of building up users. US stands to gain sizable clout via Libra.
4. Libra will draw its value from a combination of major currencies including dollar, euro - Facebook has not said whether the yuan will be included. Depending on the final ratio, the new money could rely heavily on the dollar for stability. For now, bitcoin holders are winning.
5. Thanks to plentiful hydropower used to fuel the processing power needed to create new digital coins, China was once the biggest miner of Bitcoin and other cryptocurrencies. A 2017 crackdown by Chinese regulators wiped out private exchanges and banned new cryptocurrencies.
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