• Multiple Chinese internet company have discussed avoiding cryptocurrency, amid announcement of Facebook’s Libra initiative.
  • Blockchain technology is still a subject of interest for the Chinese economy.

Facebook’s new Libra project will be bringing cryptocurrency to social media towards the beginning of next year, and there are plenty of onlookers. While the internet giants in China are definitely watching what Facebook is doing right now, it doesn’t look like those people will be doing the same.

The CEO of Tencent, Pony Ma, commented that the determining factor of how effective the Libra initiative will be is based on regulation, more than anything else. Tencent is the parent company of WeChat, a social messaging and payments app that has been mentioned frequently with Facebook’s crypto initiative.

During a private discussion on WeChat, Ma commented,

“The technology [of Facebook] is already mature enough, so it’s not difficult [to implement]. Now it just depends on whether it can obtain regulatory approval.”

Once a screenshot was posted to the platform for the public, Tencent confirmed that it was authentic. Though Tencent did not offer any other comments on this statement, they pointed CoinDesk to a comment that Ma made last year about cryptocurrency.

In March 2018, Ma said,

“The greatness of blockchain technology depends on how it’s used. Issuing initial coin offerings or digital currencies still bear too much risks … Tencent will not issue a coin and does not consider to be involved in that.”

The CEO of Ant Financial, Eric Jing, stated last year that his firm would not be getting involved with cryptocurrency, but blockchain technology is a different story. A spokesperson discussed the matter with CoinDesk, saying,

“Our stance on this hasn’t changed.”

These comments were made just a few hours before Facebook made their official statement on Libra. Even though Ant Financial, the operator for AliPay, is working to get involved with overseas markets, they are using partnerships with various payment providers in different regions to provide services to customers.

Even though much of the attention from these payment providers is on the regulatory state of the country, the reasons for not getting involved with cryptocurrency could go deeper. Yan Meng, who works with the Chinese Software Developer Network (CSDN) as the vice president, believes that the user base that Facebook has around the world almost makes the creation of global payments network with the crypto industry necessary. Otherwise, their path would be much more traditional, which the platform appears to want to avoid.

Meng commented,

“Facebook just can’t do a global payments network via traditional methods, which require applying for a license and preparing foreign exchange reserves with local banking, one market after another.”

These payment methods may not even be an option for payment firms in China, considering that there’s one economy and one fiat currency to be used.

The mobile payment market reached over $41 trillion last year in China, according to data gathered by the People’s Bank of China. Over 90% of the market comes directly from Alipay and WeChat Pay, which have payment services available in Japan, South Korea, Singapore, and another overseas market.

Men explained,

“The advantage of WeChat and AliPay is they have already gained a significant number of users from just one giant economy that accounts for 20 percent of the world’s population. China has already had a well-established payments settlement network so there may not be real demand for having a crypto stablecoin now.”

Facebook is not an available service for typical internet users in the Chinese economy. So far, with the launch of Libra being about a year way, it is unclear if China will have access to Libra.

The views and opinions expressed in the article Facebook’s Trek into Crypto Will Not Be Joined by China-Based Payment Firms do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.

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