The ‘Main Role’ of Bitcoin and Stablecoins is “Investment Alternatives,” says China’s Central Bank
PBOC Governor further said China is only looking into some kind of “minimal” regulatory requirement to prevent the speculation.
China’s central bank is calling crypto assets, Bitcoin, and fiat-based stablecoins explicitly an “investment alternative.”
“We regard Bitcoin and stablecoin as crypto assets … These are investment alternatives,” said Li Bo, deputy governor of the PBOC, on Sunday during a panel hosted by CNBC at the Boao Forum for Asia.
“They are not currency per se. And so the main role we see for crypto assets going forward, the main role is investment alternative.”
This is a highly progressive statement coming from the People’s Bank of China, which back in 2017 shut down cryptocurrency exchanges and banned initial coin offerings (ICO).
“This is the first time that the Chinese government has recognized the asset value of cryptocurrencies,” noted Chinese publication Wu Blockchain.
For the crypto industry, it is a big moment given that time and time again, regulatory FUD continues to impact the market when even regulators are working on understanding this sector, wanting to be a part of it and not get left behind. Vijay Ayyar, head of business development at crypto exchange Luno told CNBC,
“Governments are realizing that it is a viable and established, yet growing, asset class and need to regulate it. China regulating crypto would be another massive boost to the industry in China and globally.”
Li said that the central bank would keep its current regulations until new regulations are figured out, which will be “minimal” to prevent speculation. As investment alternatives, Li said,
“Many countries, including China, are still looking into it and thinking about what kind of regulatory requirements. Maybe minimal, but we need to have some kind of regulatory requirement to prevent … the speculation of such assets to create any serious financial stability risks,”
According to Wu Blockchain, Li said supervision for stablecoins issued by private companies is required to be stricter than for Bitcoin.
During the same Boao Forum, the former president of China central bank Zhou Xiaochuan also said that digital assets must serve the real economy.
Also, as we reported, Li further shared the same day that China is further expanding the trials of digital yuan in more cities.