Huawei's CEO Advocates for China's Answer to Libra

Huawei CEO Ren Zhengfei has been dealing with international scrutiny, the 2018 arrest of chief financial officer Meng Wanzhou, and serious trade restrictions from the U.S. over the last few months. That doesn't mean he's ignored what other companies are working on, though, and that includes the Libra cryptocurrency Facebook announced in June. It turns out that Zhengfei actually wants to see China announce its own answer to Facebook's coin.

Zhengfei made those remarks in an interview with the Italian website L'Economia published on July 22. Based on a translated version of the interview--which means the Huawei founder's quotes were probably more nuanced than they seem in Google's take on translated English--it almost seems like Zhengfei is setting up Facebook 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." That last sentence is debatable, considering the ease with which Facebook and other tech companies have shrugged off attempts at regulation from various governments, but Zhengfei is right in saying that China wouldn't have to wait for Libra to adopt a cryptocurrency formally. It just seems rather unlikely right now.

China's actually considered outright banning cryptocurrencies in the past. This could likely be at least partly attributed to the environmental impact of "mining" these digital coins, which has outpaced even the natural mining industry, but it's mostly because cryptocurrencies are harder to regulate. China has traditionally sought to increase its control over its citizens' lives; financial independence via cryptocurrency might undermine those efforts.

The IRS recently showed that it's not impossible to regulate cryptocurrencies, though, by warning more than 10,000 people that they need to report their crypto earnings on their taxes properly. Presumably, a cryptocurrency backed by China's government would also give it more ways to monitor transactions, control spending, and otherwise maintain authority over its citizens' finances. (To say nothing of other ways it controls its citizens.)

But that's just speculation. More interesting was Zhengfei's decision to pit an entire country against one tech company. We swear that sounds familiar... hmm... oh. Right. Maybe that's because Huawei's been company non grata with the U.S. for years. Sales bans, being cut off from its suppliers, and the arrest of Wanzhou are just some of the obstacles the U.S. has put in Huawei's way. No wonder Zhengfei wants China at large to compete with Libra.

Facebook would probably have to worry about Libra's obstacles in the U.S. before it bothers thinking about China introducing its own cryptocurrency. Several members of Congress wrote a letter to the company earlier this month telling it to suspend development of Libra and its underlying infrastructure. Zhengfei doesn't need to invoke a Chinese cryptocurrency to combat Libra; the cryptocurrency has enough opponents in the U.S.