Beijing's plan to beat Facebook at reinventing money

When Facebook announced plans this year for a cryptocurrency called Libra, it said its goal was to reinvent money for the internet age. What the company probably didn’t imagine was that its efforts might spur China to get there first.

China wants to start replacing the cash that people carry with a digital currency soon, a long-discussed project that went into overdrive after Libra was unveiled in June. Facebook has been fighting to defend its initiative against sceptical regulators, and key corporate partners have pulled out of the project. But Beijing’s ambitions appear to be moving ahead at full speed.

The system emerging in China looks very different from bitcoin and other cryptocurrencies that enthusiasts have championed as tools of emancipation from big banks and governments.

A state-issued e-currency would help China’s government know more — much, much more — about how its citizens spend their money, giving it sweeping new powers to fight crime and manage the economy while also raising privacy concerns.

“It’s extraordinary power and visibility into the financial system, more than any central bank has today,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

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