Huawei, China, and CryptocurrencyJuly 27, 2019
During the past few weeks, the domain of cryptocurrency entered a positive frenzy of activity. The prices went up for the first time in a substantially intense and energetic manner ever since the crypto winter began. At the same time, the first massive news on the tech front also came after many months and brought Libra, the Facebook-developed cryptocurrency.
This development managed to infuse the public with a crypto interest that rivals that of the first big bull runs of 2012 and 2017. Now, everyone and anyone was almost forced to pay attention to the industry and the technology behind it. Many still fail to fully understand how blockchain works – some fail completely to do this – but still, rarely anyone decided to ignore the events around Libra announcements and its subsequent ripples.
Yet, behind the flashy headlines, there is also the fact that most likely no one paid more attention than the tech companies. Among them, the Chinese giant Huawei, which had its share of headline-grabbing developments, was also taking notes. Now, the company decided to speak out about Libra and Facebook-run blockchain for financial purposes. The company’s position, as well as that of its top management, could impact not just the tech domain, but also interestingly enough, some aspects of the entire Chinese economy.
Ren Zhengfei Comments
The chief executive and founder of Huawei for the first time ever publicly discussed digital assets and cryptocurrencies. Having in mind that Ren Zhengfei is based in China, this fact is somewhat strange. After all, companies like Samsung, the direct competitor to Huawei for the smartphone consumer market, already have some cryptocurrencies capabilities embedded in their new devices. However, the CEO of Huawei chose to talk about Facebook Libra and provide some of his insight on the matter.
The comments were made during an interview he gave to the Sina Finance and they started when a reporter asked Ren Zhengfei if Libra is a way for the US government to try and keep its hegemony over global finance. The legendary entrepreneur stuck with the general Chinese outlook on the problem and confirmed that he did think so.
He went further and said that China should work activity on mitigating these concerns by launching its own cryptocurrency or digital asset. The same would be able to counteract any influence from Libra that could – in theory – be working directly with the US government. He said that the direct backing of the Chinese government could make crypto yuan into a force that would be much more relevant than Libra.
Zhengfei backed this up by stating that any country’s potential is beyond what an Internet company can muster. However, this might have a bit of that old world logic to it. Today, Facebook’s potential is as relevant to the global geopolitical and economic state as many small nations of the world combined together.
Completely expectedly, there are many in the Chinese corridors of power, both political and economic, who fear the Facebook crypto project. It might be based in Switzerland and come from the cooperation of a group of international companies, but there is still a strong belief that Libra could be somehow weaponized against China.
Here, an impact on the Chinese political and economic status was especially worrying for political and industrial leadership. There are some objective elements to Libra that back up these fears. While it is going to be a stable coin that tied to a huge range of fiat currencies, there is little doubt that the US dollar will be the main one.
All the while, the comments from the CEO of Huawei have been noted in the very center of the financial power of China – the People’s Bank of China or PBoC. Recently, it too stated that the potential of a national cryptocurrency has to be fully explored. Many are positive that China is already fully developing the same project.
Zhengfei is not the only tech tycoon who has commented on the Facebook cryptocurrency project. Before him, Pony Ma, the founder of Tencent, also in a way endorsed Libra. This billionaire, who is the man behind the company that owns WeChat, but also an ever-growing range of games like the titans of esports including League of Legends and Fornite stated that the tech behind Libra is very mature.
Wang Xiaochuan, CEO of Weibo said that this was the Internet 3.0, focusing in particular on the blockchain. In his view, the Facebook user base, numbering global 2.7 billion individuals and brands, stands a chance to transform the world. Here, in particular, the Facebook ambitions and vision are all allowing for the making of a platform that has the tools and goals that have never been seen. The tech billionaires are not alone in their attention to Libra.
Weibo, which is also a Chinese equivalent of Twitter, saw at one moment Libra become the second-largest trending topic. Some journalists and industry experts described the cryptocurrency announcement as an attention bomb. This happened along with an increase in the discussion online that are related to bitcoin, mimicking the pattern that was seen in the investment circles as well.
Local Facebook Status
The strangest thing in all of this is the fact that Facebook is completely banned in China and all users who do engage with it have to employ VPN procedures and similar backdoor measures. Still, there is no denying that the Chinese population as a whole is more than aware of the global tech trends and also mindful of all online payment developments.
After all, China is arguably the most advanced nation in terms of mobile-based payments, where almost 90 percent of all urban sellers accept some form of mobile options like WeChat Pay. What is even more interesting is the problem of traditional banking access, which is still regularly lacking in many Chinese regions, especially those in more remote areas.
With Huawei lending its support for a national cryptocurrency, it seems more and more likely that China will continue to frog leap technological advancement when it comes to the economy. A Chinese national token could be only the latest such element in a long line of advancements.