Tencent Says Facebook Libra Poses Threats for Digital Payment Systems

Tencent noted in a blockchain whitepaper that Libra will affect the traditional financial institutions, as well as internet companies that built up relatively mature payment ecosystems, like its own WeChat Pay and Alibaba Holdings' Alipay.

The company thinks that Libra can disrupt the global payment space, giving that the project saw a very high interest across nations, especially in China, after the announcement in June.

China reportedly recorded a widespread interest in the Facebook crypto initiative, ranking as the first in the list of countries with the highest number of "googling" for the term "Libra." This was according to the data from Google Trends. 

Also, one of China's biggest social media networks, Sina Weibo, recorded a massive interest in Libra.

Upon these trends, Tencent said:

"If Libra successfully launches, it will undoubtedly significantly bring an impact on the global payment space, and the entire financial industry around the world. It will drive the industry's innovation and development in user experience, service cost, technology, and business model, it will also lead to further industry reshuffle."

WeChat and Alipay already said they are not considering to join the Libra Association. The regulatory environment and how the crypto token can be designed based on the intrinsic value of the blockchain should be considered.

They also stood against crypto exchanges that use their payment services as a gateway to exchange fiat currencies to cryptocurrencies for Chinese customers.

That said, however, the Tencent whitepaper added that Libra would make "a significant presence" in the global blockchain industry.

Tencent believes digital currencies can contribute to the building of an ecosystem for blockchain applications. This is based on the fact that such tokens can significantly reduce the cost of financing, community governance, research and development, and user acquisition.