Libya must comply with international exchange regulations or "it should be banned," said Monday a senior Chinese regulator.

Sun Tianqi, chief accountant of the Chinese State Administration of Foreign Exchange (SAFE), made the comments in a speech to the Bund in Shanghai, according to a report by Reuters.

Sun called on emerging market governments to consider limiting the Libra lead, especially if the "Stablecoin" project threatened state capital control or allowed illegal transfers.

"Financial technology can help open up, innovate and develop a country's financial market," said Sun. "But it could also lead to many illegal cross-border financial activities. This should be of concern to all countries, especially emerging markets. "

Sun's concern is that a foreign digital currency is displacing the yuan in domestic transactions, which would limit the ability of the state to apply capital controls and currency management. At present, the People's Bank of China (PBoC) is putting downward pressure on the yuan, weakening it against other major currencies to boost exports.

The comments are in line with the public statements of other Chinese regulators on the controversial initiative launched by Facebook.

In July, Zhou Xiaochuan, former governor of the People's Bank of China, said Libya posed a threat to payment systems and national currencies. Wang Xin, head of the PBoC's research bureau, said that Facebook's business had spurred the development of the "digital yuan" initially proposed in 2014.

On Friday, President Xi said "seize the opportunity" offered by the blockchain. A recent list of registrations published by the Chinese Cyberspace Administration shows that the development of blockchain applications in China is progressing rapidly, with more than 500 corporate projects already underway.

China Shelf Creative Commons / Metropolitan Museum of Art

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