China and US Equity Analyst

Roger Xie

10 year investment experience on public and private equity. Deep-dive fundamental research. Specialize in China and US market.

China Digital Currency: Leading the Innovation in Financial System

RMB/ Huarong/ US-China/ Xi Jinping/ Xinjiang

The Asian ‘Euro’ (¥¥): Does It Already Exist?

China A-Share Strategy: Leading the Race for Digital Currency

China A-Share Strategy: Strong Fundamental Recovery and Decelerated Liquidity Growth

China A-Share Strategy: Deregulation in QFII/RQFII Scheme to Boost up Foreign Fund Inflow

Cross Asset Strategy

<ul>
<li>According to FT, <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> digital currency project, Libra, is preparing to launch as early as January 2021 and its value will be backed by a single currency, the US dollar. This project is still awaiting approval from FINMA (the Swiss-based Financial Market Supervisory Authority) and will works as a stablecoin, which is much less volatile than cryptocurrencies such as Bitcoin. </li>
<li>We view the slim-down version of Libra, now called Diem, as a feasible alternative to original proposal. The full-blown version 2.0 of Libra is backed by multiple currencies (such as USD, EUR, and GBP). And 1 Libra is proposed to be calculated as 0.5 LibraUSD, 0.3 LibraEUR, and 0.2 LibraGBP. However, multiple currency reserve will pose addition regulatory obstacles, as how much weights and what currency will be determined. With Libra is backed by USD only now, there is not much road blocks for Libra to be launched next year. </li>
<li>China is accelerating its efforts to launch its sovereign digital currency. In October, the People’s Bank of China published a draft law that would give legal status to the Digital Currency Electronic Payment (DCEP) system, and for the first time the digital yuan has been included and defined as part of the country’s sovereign fiat currency. The broad acceptance and launches of digital currency is the high conviction idea for 2021, such as China's Digital Currency Electronic Payment (DCEP) system and <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> Libra/Diem projects. We have highlighted China's race to digital currency in the following: <a href="https://www.smartkarma.com/insights/china-a-share-strategy-leading-the-race-for-digital-currency" target="_blank" rel="noopener">China A-Share Strategy: Leading the Race for Digital Currency</a>
</li>
</ul>


According to FT, Facebook Inc A (FB US) digital currency project, Libra, is preparing to launch as early as January 2021 and its value will be backed by a single currency, the US dollar. This project is still awaiting approval from FINMA (the Swiss-based Financial Market Supervisory Authority) and will works as a stablecoin, which is much less volatile than cryptocurrencies such as Bitcoin. 
We view the slim-down version of Libra, now called Diem, as a feasible alternative to original proposal. The full-blown version 2.0 of Libra is backed by multiple currencies (such as USD, EUR, and GBP). And 1 Libra is proposed to be calculated as 0.5 LibraUSD, 0.3 LibraEUR, and 0.2 LibraGBP. However, multiple currency reserve will pose addition regulatory obstacles, as how much weights and what currency will be determined. With Libra is backed by USD only now, there is not much road blocks for Libra to be launched next year. 
China is accelerating its efforts to launch its sovereign digital currency. In October, the People’s Bank of China published a draft law that would give legal status to the Digital Currency Electronic Payment (DCEP) system, and for the first time the digital yuan has been included and defined as part of the country’s sovereign fiat currency. The broad acceptance and launches of digital currency is the high conviction idea for 2021, such as China's Digital Currency Electronic Payment (DCEP) system and Facebook Inc A (FB US) Libra/Diem projects. We have highlighted China's race to digital currency in the following: China A-Share Strategy: Leading the Race for Digital Currency



Digital Currency: Still Remember Facebook Libra/Diem ?