Ren Zhengfei, the taciturn founder and chief executive of US sanctions-hit Chinese tech firm Huawei, has said that China should issue its own cryptocurrency to rival the planned launch of Libra by Facebook.
Usually a private character, Ren has been interviewed three times in the past two weeks, and it was in front of a group of Italian journalists who asked about Project Libra and China’s possible response, that he said:
China can also issue such a currency by itself. Why wait for others to issue it? The power of a country is always stronger than an internet company.
Ren’s words echoed the sentiment of Zhou Xiaochuan, former governor of the People’s Bank of China (PBOC), who said earlier this month that China could learn from the Hong Kong monetary system that allows “commercial entities” to issue banknotes backed by their own assets.
Echoing PBOC Sentiment
Zhou, who was PBOC governor for 15 years until his retirement last year, was instrumental in raising the profile of China’s renminbi currency, persuading the International Monetary Fund to include it its Sovereign Drawing Rights (SDR) basket in 2016. Indeed, Zhou has suggested an international effort to create a global cryptocurrency based on the SDR.
Last week the European Parliament published a paper looking into competition issues within the cryptocurrency market, which is currently dominated by bitcoin and – to a much lesser extent – ether.
The paper suggested central banks should issue “permissioned” cryptocurrencies to help reshape the current competition level. It said:
A potential inadequacy of traditional competition policy to address competition issues in the cryptocurrency markets can be found, suggesting direct public participation through a central-bank digital currency as a remedy.
China Daily reported on July 9 that the People’s Bank was, indeed, accelerating its efforts to be among the first central banks to issue a government-backed digital currency, quoting Wang Xin, a senior official at the PBOC. Wang said:
A digital currency issued by the central bank can improve the efficiency of monetary policy, and help to optimize the payment system.
Huawei Spying Allegations
Back to Ren’s recent interviews, and much of his time was spent defending Huawei against US accusations that the Chinese state was using the company’s technology for spying. He told Yahoo Finance this week:
I don’t know what the national security concern is to the US. We don't have any networks in the US, nor do we intend to sell our 5G products there anyway, so there's no way we can pose a threat to the US. I think the US is too apprehensive.
When asked by the Italian media if he thought the US sanctions were to curb the ascendance of Chinese tech companies, Ren said:
The US sanctions and containment against Huawei may be a misunderstanding of the United States. I welcome US government officials to come to Huawei to see if they can eliminate misunderstandings.