Huawei’s CEO Wants China Answering to Facebook Libra with its Own Stablecoin

Ren Zhengfei, CEO of Huawei, made some fascinating remarks about Facebook Libra and China during an interview with the Italian website L’Economia, which was published on July 22.

According to him, China doesn’t have to wait to be invited to the ‘Libra club’ as the country is capable of issuing such a digital currency by itself. He further added that Libra faces several serious obstacles in the U.S. alone, and of course in other parts of the world as well. Let’s review what other statements and remarks he made that might propel China towards its own state-backed digital currency.

Both Huawei and Zhengfei are presently encountering great challenges. The 74-year-old Zhengfei, who was a technician in the Chinese army, was referred to by President Trump as an “evil prince.” The company’s CFO Meng Wanzhou, who also happens to be Zhengfei’s daughter, was arrested in 2018 in Canada, and the company is still facing several trade issues as the U.S. imposed strict trading and operating restrictions on the company.

But in spite of this mess, Zhengfei wasn’t sitting idle, continuing to build the company and always evaluating the tech and financial landscape. It appears that Facebook’s Libra is something that he couldn’t get off from his mind, and he now wants China to answer Facebook Libra with its state-backed cryptocurrency.

From how and what he talked about Libra and China during the interview, it seems like Zhengfei considers Facebook’s cryptocurrency as China’s next opponent. Here’s what he said in response to a question about China being invited to “the Libra club”: “Even China is able to issue such currencies, why wait for Libra? The strength of a state is greater than that of an Internet company.”

China has already attempted to ban almost completely cryptocurrencies due to the environmental effect of crypto mining and the difficulty in regulating virtual assets. On the other hand, the U.S. IRS has showed that it is not impossible to regulate cryptocurrencies as the tax collector agency sent a warning to ten thousand crypto holders, notifying them they need to report capital gains or losses of their crypto holdings and file the taxes respectively. If China will launch its state-backed cryptocurrency it would probably be similarly easier to monitor these transactions, and collect the ensuing necessary taxes.

It is no wonder why Zhengfei wants China to answer Facebook’s Libra with its own crypto coin. The U.S. has already put several hurdles in Huawei’s way – sales ban, cutting it off from its suppliers, and involvement in the arrest of the company’s CFO and Zhengfei’s daughter are a few of them.

Facebook’s Libra faces many challenges in the U.S. alone as several members of Congress wrote a letter to the company telling the company to stop the development of Libra. In other words, Zhengfei may not have to involve China, as Libra has enough opponents in the U.S.