Has China changed its position on Cryptocurrencies?
It is some revelation coming from China, where deputy governor Li Ba of the People’s Bank of China (PBoC) said that the central bank is considering cryptocurrencies to be alternative investments.
Deputy Li made the statement while discussing digital assets in China in relation to regulation. His statement is essentially a first time that a Chinese official formally recognizes Bitcoin and other cryptocurrencies.
The credits go out to Chinese journalist Colin Wu who broke the news on Monday. The PBoC official stated there is still regulatory risk for the central bank when it comes to cryptocurrencies. Therefore, China is still banning cryptocurrency exchanges and Initial Coin Offerings (ICO’s).
The current restrictions in the crypto space will remain until more clarity is there.
Alternative investment
“We believe that Bitcoin and stablecoins are encrypted assets. Encrypted assets are an alternative investment option and are not a currency. At the moment, we believe that crypto assets can play a major role in the future. However, either as an investment tool or as an alternative investment.”
There has been a lot of debate over stablecoins in the past few years. especially regarding the Libra (now Diem) project launched by social media giant Facebook.
According to Li, stronger government regulation is needed for stablecoins issued by private companies. “In the future, if any stablecoin hopes to become a widely used payment tool, it must be subject to strict supervision, just like banks or quasi-bank financial institutions are subject to strict supervision,” he continued.
China, a crypto enigma?
While China is a country with very strict regulations on cryptocurrency activities, it is estimated that roughly 65% of all Bitcoin are mined in the country. In addition to that, some of the world’s largest cryptocurrency exchanges, like Binance, are Chinese owned. Before cryptocurrency exchanges were banned a few years ago, China was the number 1 cryptocurrency market in the world.
Aside of regulatory uncertainties, there is more going on in the country that is of global interest. China’s central bank is in an advanced stage of trialing its digital currency. And recently some insinuations were made over China’s “misuse” of Bitcoin as a weapon against the United States.
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Source: igaming
