For the time being, the regulations on cryptocurrencies in China will not undergo any changes. The CEO of Babel Finance classified the PBoC deputy governor’s comment as progressive.
People’s Bank of China (PBoC) Deputy Governor Li Bo recently expressed his views on Bitcoin and stablecoins. He recognized this type of asset as an investment alternative during the Boao Forum for Asia.
The new deputy governor of the PBoC stated that they do not consider cryptocurrencies as currencies per se. For that reason, they believe that their role is to position themselves as investment alternatives.
“We consider Bitcoin and stablecoins to be crypto assets. They are investment alternatives rather than currencies per se. Therefore, the main role that we see for them in the future is that of an alternative investment,” said Li Bo, deputy governor of the PBoC.
After Positioning itself as the Largest Buyer of Bitcoin, China Bans Its Use
In 2017, China was the largest buyer of Bitcoin, but it then banned ICOs (initial offerings) and exchanges within its territory. Concerns related to financial instability, scams, and cryptocurrency crime were the reason for it.
This is the first time that China has recognized the value of assets such as cryptocurrencies, according to local media. The Asian country is still analyzing the regulatory requirements to control possible speculation with these assets.
Li Bo said that the PBoC will maintain its current regulations on cryptocurrencies while this assessment happens. Everything seems to indicate that China could accept the use of Bitcoin and other cryptocurrencies as long as they comply with regulations.
China Seems to Have Changed Its Opinion on Bitcoin and Stablecoins
Babel Finance CEO Flex Yang called the PBoC deputy governor’s comment “progressive,” according to CNBC Television. For his part, Vijay Ayyar, head of business development with crypto exchange Luno, called it “significant.” Furthermore, he said that it was different from the PBoC’s previous positions on cryptocurrencies.
“Governments are realizing that [Bitcoin] is a viable and established asset class. However, it is still growing and needs to comply with certain regulations. Regulation of cryptocurrencies would be another massive boost for the industry in China and the rest of the world,” said Ayyar.
Li Bo’s Statements Suggest that China Is More Open To Cryptocurrencies
PBoC Deputy President Li Bo is still unclear whether there will be new regulations related to cryptocurrencies in China. However, his remarks could be the prelude to a shift in thought and action around digital asset regulations.
Li Bo’s statements seem to suggest that China could be open to the cryptocurrency market after 4 years. Turkey stopped its adoption, following the recent publication of an Official Gazette. The Central Bank of that country prohibited the use of cryptocurrencies and other digital assets to make payments for purchases and services.
The fear about the illegal use of Bitcoin and other cryptocurrencies is not unique to China and Turkey. The United States has also lobbied to make regulations that control the use of these assets. However, they are aware of the relevant role that they play in the world economy.
By Alexander Salazar