- The new deputy governor of the People’s Bank of China (PBOC), indicated that the country may pave the way for Bitcoin and other cryptos in its investment space.
- His calling of Bitcoin an “investment alternative” has many industries speculating over the country’s changing stance towards cryptocurrency.
China’s Central Bank saw a regime change recently. Li Bo, the new deputy governor of the People’s Bank of China, made headlines with his remarks on Bitcoin. He called the original and the most valuable cryptocurrency an investment alternative. This statement carries much weight as the Chinese government banned cryptocurrency trading and ICOs in 2017.
How the world is interpreting it
The statement has compelled many analysts and industry leaders to interpret it in their language. Some called it “progressive” and indicated that China may have changed its stance on digital assets. China was the cryptocurrency mining hub before it cracked down on miners. It was also one of the biggest buyers of Bitcoin.
Talking to CNBC at the Boao Forum for Asia, Li Bo said that we don’t regard Bitcoin as a legal tender. However, there is a strong potential in Bitcoin and it can become a strong investment alternative. For the last few weeks, Bitcoin’s price rally has consistently increased.
In 2017, when China banned crypto-related activities, it looked like it would never rescind its decision. However, the new deputy governor hinted that the government might perhaps give some leeway to Bitcoin and other cryptos. He also insinuated that government might think of drafting a regulatory framework too.
Considering all the possible reasons
Considering China’s competition with the US on every front, it won’t be wrong to surmise that the former also doesn’t want to lag in the crypto race. The United States and Europe have confirmed that they are working on the regulatory framework for cryptocurrency. They both are planning to implement it by the end of 2024.
However, one cannot assume that it is the only reason for the change of stance toward digital assets. In the meantime, some other prominent personalities also expressed their views on it. The CEO and founder of Babel Finance, Flex Yang, said it is certainly a significant clue about China’s changing disposition toward cryptocurrency.
Vijay Ayyar, head of business development at crypto exchange Luno said that it shows that the country is probably ready for some crypto infusion in their economy. Some experts also feel that it could result from Bitcoin’s rising prominence in the world. The filing of Bitcoin ETF by BlackRock and many other companies has made crypto quite a coveted asset.
The price of Bitcoin hit an all-time high in the last few weeks, and its market capitalization is ballooned. Significant organizations from various sectors have purchased it. Reportedly, China is also experimenting with its central bank digital currency (CBDC) Yuan. The country wants to test its potential to replace cash and coins. So for the crypto community, it is a piece of positive news
Maybe, China could emerge as the flag bearer of cryptocurrency in Asia. But no one can be sure about the country’s crypto-inducting initiatives. Filled with a competitive spirit, the country may take bold steps to embrace digital assets. With the world trying to use blockchain, it would make sense too.