Facebook's Libra poses a potential challenge for sovereign currencies issued by central banks, said Zhu Min, former deputy governor of the People's Bank of China (PBC), the country's central bank, on Friday.

Digital currency is a future trend, and central banks are under pressure from the market as cryptocurrencies, though not sovereign, are eroding sovereign currencies. Small countries in particular are worried that their sovereign currencies may take a hit if they don't issue digital ones, Zhu told reporters on the sidelines of the New Economy Forum co-hosted by Bloomberg and the China Center for International Economic Exchanges in Beijing.

The central bank of Uruguay was the world's first to become digital-currency-ready, following its announcement in November 2017 that it would begin a test to issue digital Uruguayan pesos. 

China, Canada, Britain and Singapore are at the forefront of digital currency research, said Zhu, also an ex-IMF official. 

Notably, the PBC-backed digital currency plan known as Digital Currency Electronic Payment is a feasible and controllable framework which was envisioned to allow for effective monetary policy transmission, he said. 

When asked if China will become the first among major global economies to launch a fiat digital currency, Zhu said, "It doesn't matter if [China] will be the first, and no one is vying to become the world's No.1."

The most important thing for China's digital currency push is to ensure the policy and technology framework are mature, he noted.

Global Times