Cryptocurrencies backed by private firms face tough fight

China's central bank is still in the process of developing its own digital currency, and competition among government-backed digitalized currencies can be expected in the "digital era", said a central bank official on Tuesday.

Some digital currencies issued by the private sector, such as Facebook's Libra, will find it hard to compete with the State-issued fiat money, or the central bank digital currency (CBDC), said Wang Xin, head of the research bureau of People's Bank of China.

"The right to issue money is important for the government, as it is one of the fundamental measures for the government to raise fund and implement macroeconomic adjustments," said Wang.

If there is a financial crisis, the central bank can inject liquidity and stabilize financial system through the flexible adjustments of money supply, a function that is hard to achieve for the privately issued money, he said.