Beijing has been cracking down on bitcoin (BTC) negotiations for almost four years and has always shown a very critical view of crypto. Now, the Chinese central bank (People’s Bank of China) has called cryptocurrency an “investment alternative”, marking a major change in attitude towards the digital currency.
The new comment came from Li Bo, vice president of China’s central bank. This last Sunday (18), he spoke during a panel organized by the network CNBC at the Boao Forum for Asia. The comment was very well received by the cryptocurrency market, indicating that the Chinese government may take less conservative regulatory measures.
“We consider bitcoin and stablecoins to be crypto … They are investment alternatives,” said Bo during the event. “They are not coins in themselves. The main role that we see for these assets going forward are as investment alternatives ”.
The speech was seen as a legitimation of investments in cryptocurrencies by the Chinese central bank. The news was one of the external factors that helped bitcoin’s recovery after its biggest daily drop since February this weekend. The price of cryptocurrency reached $ 57,000 on Monday (19), according to the index CoinDesk.
China fights bitcoin since 2017
In 2017, China began taking steps to limit and crack down on bitcoin in the country. That year, the Chinese government closed local cryptocurrency exchanges out of concerns about the stability of the current financial system.
“Many countries, including China, are still investigating and thinking about what the regulatory needs are. Even if minimal, we need to have some kind of regulation to prevent speculation on such assets from creating any serious risk to financial stability, ”said Bo.
He added that the measures taken so far will be maintained. However, the market expects the next cryptocurrency regulations in China to take a different approach.
Industry expects less conservative stance
In an interview with CNBC, Flex Yang, CEO and founder of financial services company Babel Finance, said Li Bo’s comment was “forward-looking”. Vijay Ayyar, head of business development at the cryptocurrency exchange Luno, believes that the statement “is quite significant and is definitely different from his previous positions on cryptocurrencies”.
“Governments are realizing that it is a viable and consolidated asset class, although it is still growing, and that it needs regulations,” said Ayyar. For him, creating rules and not prohibitions in China would be “another big boost for industry in the country and globally”, which would have motivated the change of attitude of the Chinese central bank.
China is launching its own cryptocurrency
China is currently the country closest to consolidating a central bank cryptocurrency (CBDC). The digital yuan is already in a pilot phase, being distributed to the population in a controlled manner while state financial institutions are adapting to a new electronic payment system.
The goal is not to create a cryptocurrency like bitcoin, but to replace the physical money in circulation. The focus of the Chinese CBDC is payments, with plans to even create a simplified cross-border transaction system.
China has been conducting a series of tests with the digital currency in the main cities. Bo also said the central bank has plans to test its CBDC with foreign visitors during the Winter Olympics in Beijing in 2022.
With information: CNBC