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China Began Researching Cryptocurrencies As Investment Instruments

For the first time, the Chinese authorities recognized digital currencies as investment instruments. It was stated by the deputy head of the People’s Bank of China Li Bo. According to him, more stringent requirements may be applied to the stablecoins of private companies than to Bitcoin. Li Bo also emphasized the uncertainty in the legal regulation of digital assets in China. But, at the same time, he confirmed the value of the crypto as an investment tool.

Journalist Colin Wu first announced this data. According to his Twitter account, the deputy head of the NBK spoke at the Boao Forum for Asia on Sunday. There this statement was made.

Besides, an official from the People’s Bank of China spoke about the regulatory risks for crypto. He referred to the ban on crypto exchanges, and ICOs introduced in the fall of 2017. Hence, digital currencies are recognized exclusively in the form of digital goods. And these actions, according to Li Bo, are not decisive. The PRC state regulator will continue maintaining the current attitude towards crypto until all regulation options are studied.

We believe that BTC and stablecoins are encrypted assets. They can be used as an alternative to traditional investment instruments but not a full-fledged currency. Therefore, we believe that crypto assets will become something like bank deposits shortly

About stricter supervision of stablecoins, Li Bo expressed this opinion:

If stablecoins are to be used as a means of payment soon, then they need to be subject to stricter regulations. They would be similar to banking or quasi-banking organizations.

It seems that the former vice-mayor of Chongqing took a harder line than the head of the PoBC Yi Gang. Li Bo only recognized BTC and other digital coins as a store of value.

The representative of the state regulator spoke at the Boao Forum for Asia together with the former governor of the People’s Bank of China, Zhou Xiaochua. He drew parallels between the traditional financial system and the digital currency:

Any finance should work for the good of the economy. Therefore, any digital currencies or tokens must be closely linked to the real economy.

Now the state financial regulator of the PRC is showing progress in terms of developing the digital economy. In 2020, he began a pilot launch of the “digital yuan.” It took 6 years to develop the project, and now the electronic currency is being tested in large cities in China. At the same time, it’s noted that priority will be given to internal use for the first time. However, PoBC officials don’t deny the possibility of implementing international payments in the future.

The Chinese authorities expect to coincide the full launch of the digital yuan with the 2022 Winter Olympics, which will be held in Beijing.

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