After a series of meetings and conferences in China, Facebook announced its cryptocurrency plans in June, RBC analysts said China's yuan-backed central bank had stepped up development of the Digital Currency (CBDC).
"China's CBDC could be strategically positioned to be the de facto global digital currency in emerging economies if the US rejects Libra and decides not to regulate in the US to encourage crypto innovation," RBC said in a note to clients on Tuesday. It also has a potential expansion advantage through messaging and payment apps such as China's Alipay, WeChat and UnionPay, analysts said.
Facebook's tool to disseminate Libra could be WhatsApp:
Facebook has said in the past that it plans to do something similar by allowing users to post Libra in Messenger and WhatsApp. The currency would also be available through a standalone app Calibra. "We believe that messaging apps play the biggest role in accepting consumers into digital currencies," RBC said.
Libra has come under intense scrutiny since its announcement, and many of the initiative's biggest backers, including Visa, MasterCard and eBay, have left the project. The company announced an updated list of 21 firms that continue to support and oversee Libra in a statement on Monday.
Libra's chief executive, David Marcus, tried to soothe regulators ' concerns about money during a Senate hearing in July. Facebook CEO Mark Zuckerberg is scheduled to speak before Parliament on October 23 to address concerns about Libra.
RBC believes many companies are still interested in the Libra project and believes they can return under the right circumstances. "If a clear roadmap is developed and Libra proceeds successfully, it would not surprise us that these firms would re-apply for the project, "the RBC analyst said in a statement.