China is exploring the dynamics of cryptocurrencies as investment tools, ending a period of utterly negative attitudes towards their usefulness.
Li Bo, recently appointed Deputy Governor of the People’s Bank of China, speaking at the Boao Forum for Asia, an economic conference that brought together a number of government officials, including the President of China Xi, said:
“We see bitcoin as an encryption asset. These are alternative forms of investment and are not currencies per se. Our goal is to see encryption data as an alternative form of investment. ”
This is the first time that a Chinese official with a high position in the regulatory authorities has referred to bitcoin and even separated his role from its use as a currency.
For many years the position of the People’s Bank of China was against the use of cryptocurrencies in its economy, highlighting the fact that they are mainly used for money laundering and tax evasion. Chinese regulators outlawed Initial Coin Offerings in 2017, and a year later imposed a total ban on cryptocurrency trading in the national currency.
Stablecoins such as Tether (USDT) have reportedly been used on a very large scale for money laundering and illegal gambling.
Of course, cryptocurrencies had gained widespread acceptance in Chinese society, so in response China is accelerating the growth of its digital yuan, the official central bank digital currency.
Deputy Governor Li Bo said China’s central bank should focus on private stablecoins used as a means of payment, which should be subject to a stricter regulatory framework than bitcoin, which is essentially controlled like banks.
“In the future, any stablecoin that aspires to become a widely accepted payment solution will need very strong regulation, such as a quasi-bank, to serve this type of operation.”
Li Bo then clarified that the speculative nature of cryptocurrencies remains a threat to China’s economic stability, perhaps preparing the ground for announcing new bitcoin regulations.
However, the central bank will continue to apply strict rules and practices against cryptocurrencies, until the introduction of new clear regulations, Li added.